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Boeing bags Qatar order while Airbus stutters

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Boeing (BA-N) booked the first big order on day one of a rain-sodden Paris Air Show, while arch-rival Airbus was left red-faced after pulling two flagship planes from flying displays.

Gulf carrier Qatar Airways on Monday ordered six Boeing 777-300ER wide-body jets worth $1.7 billion US at list prices, kickstarting what is expected to be a flurry of deals involving Asian and Middle Eastern airlines as they seek to boost transport links for their booming economies.

The announcement comes a day after Airbus unveiled plans to boost the range of its future competing A350, of which Qatar is the biggest customer.

The main battleground of air show, however, is expected to be narrow-body planes which are the backbone of fast-growing budget airlines and where Airbus may have the upper hand with its revamped A320 model, whose more efficient engines save airlines 15 percent in fuel costs, according to the company.

Engine maker Pratt & Whitney boss David Hess forecast an "astounding" amount of demand for the A320neo, and sources close to the matter said Airbus was likely to report an order on Monday for 30 A320neo planes worth some $2.4 billion at list prices from Scandinavian airline SAS.

Qatar Airways also said it hoped to conclude a deal this week to buy A320neo planes.

Boeing conceded it might lose some custom while it makes a decision about whether to re-engine or redesign its competing 737 narrow body plane, although it was confident of winning out over the longer term.

The air show could bring two record deals on successive days for the A320neo if Airbus's plans come to fruition.

A $16 billion provisional deal from IndiGo to buy 180 A320neo passenger jets, first announced in January, could be finalized, although talks may also drag beyond the air show.

If sealed, that would set a record for the number of planes in one transaction.

Sources close to the matter said it could be rapidly eclipsed by a 200-plane order being fine-tuned between Airbus and Malaysia's AirAsia.

On day one, however, Airbus was still reeling from a series of mishaps on the eve of the show, including a taxiway collision involving an A380 superjumbo.

The right-hand wing-tip of a test plane for the world's largest jetliner, with a wingspan of almost 80 meters (yards), scraped a building at Le Bourget airport on Sunday and was withdrawn from the air show's traditional flying displays.

The aircraft was hidden out of sight on Monday as President Nicolas Sarkozy inaugurated the show, and was a source of embarrassment for Airbus only hours after the arrival of its new competitor -- Boeing's elongated 747-8 superjumbo, which is showing its distinctive silhouette abroad for the first time.

The latest version of the legendary 747 jumbo touched down in orange and red "sunrise" livery symbolizing the importance of Asia, whose economic growth is set to dominate aviation in coming years starting with this week's air show.

A second Airbus aircraft, the delayed European A400 airlifter, was also initially withdrawn from air display after a gearbox problem.

ASIAN DEMAND

Demand for aircraft is on a sharp rebound driven by demand from Asia's rapidly growing airports and the Middle East.

"Those two markets will enjoy at least one third if not more of the demand increase for global air traffic in the next decade," said Philip Toy, a managing director at Alix Partners.

Airbus sales chief John Leahy said on Monday he expected to sell more planes this year than in 2010, though he declined to give an estimated figure

The Airbus A320neo has also benefited from airline concerns about fuel costs. Boeing said on Sunday it would decide by end-year whether to upgrade its 737 with new engines from about 2016, as Airbus has done, or build an all-new jet in 2019.

"They will sell hundreds but it is hard to tell what is gross and what is net, what is a conversion from an earlier order. There are myriad complications," said Teal Group analyst Richard Aboulafia of the A320neo.

Orders are likely to include a confirmation of an $8 billion 100-plane order from leasing giant ILFC and another plane order for both Airbus and Boeing planes another big lessor, GECAS.

Russia and China will flex their muscles as potential rivals to Airbus and Boeing, especially during a Tuesday visit by Russian Prime Minister Vladimir Putin and some analysts expect surprise sales. But Western planemakers say it will be some time before newcomers mount a serious challenge in civil aerospace.

Brazilian group Embraer also grabbed headlines, saying it had won orders for 39 190 regional jets, worth $1.7 billion at list prices.
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