The Paris Air Show officially kicked off on Monday, an event where aircraft makers and potential clients get together. The main focus is of course on the world’s two largest aircraft producers, The Boeing Company (NYSE:BA) and EADS NV (EPA:EAD)’ Airbus division. These two aviation titans will be battling it out for large orders during the show, as well as showing off their latest models. With the industry in good shape at the moment, commentators expect the two companies to sell plenty of airplanes this week.
Helped in part by the demand for new and more fuel efficient aircraft, The Boeing Company (NYSE:BA) and Airbus have been in a significant upswing lately in terms of sales as well as earnings. With orders pouring in, especially from Asia, the two rivals are in great shape financially, and are expecting this strong performance to continue over the next few years. According to Airbus’ CEO, the company is expecting to more than double its operating margin in the next few years.
In terms of revenue growth, Airbus seems to be outperforming Boeing, with a year-over-year increase of 8.6% versus The Boeing Company (NYSE:BA)’s decline of 2.5%. Airbus managed to double its income for commercial aircraft for the first quarter of the year, while Boeing’s earnings in the commercial segment were up about 13%. Both stocks have been rallying impressively over the last year, The Boeing Company (NYSE:BA) up over 41% and Airbus tacking on nearly 70%.
So far, Airbus has been stealing the show in terms of orders in its home turf of Paris. Demand has been particularly robust from Asian carriers, who are snapping up the A320 at a record rate. AirAsia is putting together a $17 billion order for 200 A320’s, a deal which is to set the record for the largest number of aircraft sold in one contract. Two Asian low-cost airlines have also put in orders for the fuel-efficient airplane, Cebu Pacific from the Philippines buying around $3.8 billion worth and India’s Go Air buying up to $7.2 billion. In total, at the time of writing, Airbus is expected to scoop up around $72.2 billion in orders during the show.
While Airbus is expected to seal the majority of the deals during the air show, Boeing for its part has raked in some fairly large contracts and is seeing strong demand for its new Dreamliner. The US airplane maker secured a $2.9 billion deal with GE Capital Aviation Services, GE’s aircraft leasing segment, for 10 787-10X planes. In another deal, travel company TUI Travel has put in an order for 60 737MAX planes in a transaction worth around $6.1 billion.