Sukhoi to Unveil 30 Superjet Orders at Air Show

ReutersWorkers standing near a Superjet-100. Thirty orders for the regional plane are expected to be announced Tuesday.
LONDON -- Sukhoi will announce 30 orders for its Superjet-100 regional aircraft at the Farnborough air show, a spokeswoman said Saturday.

But with industry losses of $2.3 billion forecast worldwide this year and 25 airlines ceasing operations in the past six months, many carriers who usually use the event to trumpet new plane orders are expected to keep their wallets firmly shut.

The Superjet orders will be unveiled at a news conference on Tuesday, the Sukhoi spokeswoman said, without elaborating on who was buying.

Sukhoi pre-sold 73 of the aircraft, designed to seat 78 to 98 passengers, mainly to Russian airlines. But it has embarked on an export campaign together with Italian partner Alenia Aeronautica. That puts Sukhoi in direct competition with Brazil's Embraer and Bombardier of Canada, which dominate the 70- to 100-seat aircraft market and will be touting their plans at the air show.

Aeroflot said this month that it had been informed that Sukhoi would delay the first deliveries of the jet by a year to third-quarter 2009. Aeroflot had expected delivery of 30 of the planes this year.

The Farnborough air show will offer Sukhoi a chance to show off the jet. The Superjet's first flight, initially planned for 2007, was delayed by several months, and the aircraft took off for the first time in May.

But with headwinds buffeting the aviation industry from high fuel prices and the credit crisis, the question is whether airlines will be looking to buy aircraft at all.

"There are going to be some orders, but the overall state of play is going to be quite downbeat," said Evolution Securities analyst Nick Cunningham. "Everybody's too nervous to order airplanes and also rather concerned that they ordered too many last year and the year before."

Farnborough is still a key date on the industry's calendar, with more than 300,000 people expected to attend the show outside London beginning Monday, where almost 1,500 exhibitors from 35 countries will show off the latest in aviation technology, including flight simulators and surveillance aircraft.

The show, which alternates years with an event in Le Bourget in France, is also traditionally the host of a duel played out between U.S.-based Boeing and its European rival, Airbus, for customers, but questions this time around are instead likely to focus on how many orders the pair may have to cancel later this year.

Airbus has booked 487 net orders for aircraft so far this year, besting Boeing's total by 12 aircraft, but both expect their 2008 order totals to fall far short of their record 2007 total of 2,754 orders.

The only clear buyers for commercial aircraft so far at Farnborough are from oil-rich Gulf states, who can rely on sovereign wealth funds to back their purchases.

Purchasing activity from U.S. or European carriers is almost certain to be subdued in the face of surging oil prices.

Kerosene, the fuel used to power planes and distilled from crude oil, now accounts for around 40 percent of airline costs, up from 13 percent five years ago, according to IATA.

Airlines in Western countries are also coping with inflation, the credit squeeze and slowing economic growth -- all factors that are expected to reduce demand for flying.

Among the 25 carriers that have already succumbed to the adverse conditions and ceased flying include business-class airlines Silverjet and MAXjet, Cameroon Airlines and U.S.-based Frontier Airlines. In comparison, only eight airlines folded in the six months after the 9/11 terror attacks.

Aircraft makers have been pushing the line that crude prices could be a driver for airlines to fast-track investment in more fuel-efficient planes, such as the Airbus A380 and A350, as well as Boeing's 787.

Boeing last week raised its outlook for spending on commercial airplanes by all plane makers, including Airbus, over the next 20 years by 14 percent, helped in part by an expected 5 percent rise in worldwide air travel and the demand for new, more fuel-efficient planes.

However, Cunningham said plane makers were still not manufacturing the new narrow body, fuel efficient aircraft desired by carriers.

"Ironically, the market's crying out for it, but the product's not there," he said.

AP, Reuters