Airbus takes off with big order on first day of Dubai Airshow

Airbus came out strongly at the Dubai Airshow on Sunday with a group order for 255 single-aisle A321 aircraft, marking the first major deal of its kind since the pandemic began.

The European plane-maker's announcement came shortly after its American rival Boeing said it would fulfil an order to convert 11 single-aisle 737s into cargo aircraft, and as the aviation industry slowly recovers from a Covid-induced downturn.

Airbus said the order came from Wizz Air, Frontier, Volaris and JetSMART—all from US company Indigo Partners—for a total value of more than $33 billion, according to the latest list price published by Airbus in 2018.

The total cost of the order was not disclosed, but list rates are rarely applied to large deliveries.

Hungarian low-cost carrier Wizz Air will receive 102 aircraft, American Frontier Airlines will receive 91, while 39 will go to Mexico's Volaris and 23 to Chilean JetSMART.

Airbus CEO Guillaume Faury said that because the four companies fall under the same aviation-focused equity firm, it allowed for a large order and for an attractive price, adding: "It's a give and take situation."

Deliveries are set to begin in 2025.

Wanted 'to be early'

Representatives of the embattled aviation industry flocked to the Dubai Airshow on Sunday as the sector emerges from coronavirus pandemic travel restrictions and faces pressure to reduce its impact on climate change.

The five-day event in the United Arab Emirates is the industry's first large gathering since Covid-19 clipped its wings last year, as border closures left airports deserted and hundreds of aircraft idle.

Air traffic has since bounced back, though it was still 53 percent lower in September compared to pre-pandemic levels.

Commenting on Sunday's deal, Indigo Partners chief Bill Franke said the company wanted "to be early in the (recovery) process".

Christian Scherer, Airbus Chief Commercial Officer and head of Airbus International, said the Indigo Partners airlines had "acted fast and decisively over the last few months to position themselves for this landmark order as the effect of the pandemic recedes and the world wants more sustainable flying".

Airbus also said Sunday that the UAE's air force ordered two additional A330 Multi-role Tanker Transport (MRTT) aircraft, bringing the number of MRTT planes among its fleet to five.

'Nascent phenomenon'

Boeing meanwhile announced it had signed a contract with an Icelandic company to convert 11 single-aisle 737 aircraft into cargo planes.

The American plane-maker did not disclose the value of the contract with Icelease to convert 11 Boeing 737-800BCFs—previous generation of the MAX series—into cargo aircraft.

To meet growing demand, Boeing said it would open three new freighter conversion lines in Canada and the United Kingdom, in addition to those recently opened in China and Costa Rica.

"It was a nascent phenomenon before Covid. Pre-Covid, we just couldn't put enough 737 (cargo planes) out there to satisfy the market," Ted Colbert, CEO of Boeing Global Services, told reporters in Dubai.

The aviation industry has weathered the global supply chain crisis that has created headaches for the shipping industry.

But amid a slump in global air traffic, during which traditionally half of all air freight was carried in the holds of passenger aircraft, airlines have turned to cargo planes.

And with a decrease in air traffic during the pandemic, hundreds of planes have been abandoned—particularly older generation ones—which could potentially be turned to cargo aircraft.

Boeing said in a statement it forecast 1,720 freighter conversions over the next 20 years to meet demand, adding it has "more than 200 orders and commitments from 19 customers".

While wide-body aircraft, such as the Boeing 777, 767 and A350 have their own cargo versions, single-aisle aircraft such as the 737 do not.