6 September 1998

Airbus sounds $3bn Farnborough fanfare

By Mary Fagan

Airbus, the European aircraft consortium in which British Aerospace is a partner, is set to announce orders worth at least $3bn at the Farnborough Air Show, which begins today.

Almost $1bn of the value is likely to go to Rolls Royce for Trent engines to power the airliners. Rolls Royce is also expected to win orders worth a further $1bn for smaller engines made by its US subsidiary, Allison.

The orders and options for 20 Airbus A340 aircraft are expected to come from the United Arab Emirates airline and the International Lease Finance Group, which is the world's largest aircraft leasing organisation.

They will seal a spectacular few weeks for Airbus, which at the end of last month won an order from British Airways, until now a loyal customer of arch-rival Boeing, for up to 188 aircraft. Airbus already claims to have taken the lead over Boeing in new orders so far this year.

The BA deal also resulted in orders worth hundreds of millions of pounds for RR's Trent engines. Rolls declined to comment, but analysts say the deals next week involving the group will underpin its attempts to stress the diversity of its product range.

The orders for AE3007 engines from the Allison arm will almost certainly ensue from demand for ERJ135 and ERJ145 regional jet aircraft from Embraer, the Brazilian group. Embraer has capitalised on the increasing trend away from turbo-prop aircraft in the 37- to 50-seat range and now numbers major airlines among its customers.

There are rumours that American Airlines, which has previously ordered 45 of the ERJ145 aircraft, wants as many again of the smaller ERJ135s.

According to the Society of British Aerospace Companies, one strong theme running through this year's Farnborough show is that of "partnering" within the industry. British Aerospace will have a vast "Partnership Village" covering 11,000 square metres and involving a series of silver domes using the same structural techniques as the Millennium Dome and using Buro Happold, the consultants on the Dome.

Each mini-dome will be devoted to one of BAe's major partnerships with European and US groups.