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Boeing Focuses on Safety, Not Sales, at Paris Air Show -- Update

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06/20/2019 | 12:21pm EDT

By Robert Wall and Andrew Tangel

LE BOURGET, France -- Boeing Co. arrived at the world's largest aerospace extravaganza battling the biggest crisis in its history. It departs having secured a crucial vote of confidence in its beleaguered 737 MAX jetliner and the prospect of further orders on the horizon.

Still, the fallout from two fatal 737 crashes cast a shadow over Boeing at the Paris Air Show -- a key industry gathering for showcasing aircraft and securing sales -- and the U.S. plane maker also fell behind rival Airbus SE in the race to win the emerging market for long-range, midsize jets.

Boeing executives spent the week seeking to restore the company's battered reputation, shunning the customary fanfare of trumpeting billions of dollars of orders. Its focus, executives said daily, was on safely returning the MAX to service.

"It's been a devastating set of events," Ihssane Mounir, Boeing's head of commercial plane sales, said Thursday. "We know we fell short."

Its efforts to reassure customers bore fruit. Boeing secured a blockbuster sale of 200 MAX jets to British Airways owner International Consolidated Airlines Group SA -- its first MAX sale in months -- and Mr. Mounir said more orders for the embattled jet were possible.

"There are customers we are talking to today" he said. "We are engaging with several across the globe."

Airbus was left fuming over the deal. "We told IAG we would like to bid for this business," the European plane maker's Chief Commercial Officer Christian Scherer told reporters Thursday.

Boeing didn't disclose which other customers it was talking to, but analysts said the show had been broadly positive for the plane maker. The orders are worth more than $30 billion before industry standard discounts.

Despite the vote of confidence from one of the world's largest airlines, Boeing is far from over the MAX crisis. The jet still isn't authorized to fly. And with more than 400 planes idled, the company likely faces billions of dollars in compensation payments to airlines, analysts estimate.

Boeing has developed a software update for the MAX to fix the flight-control system flaw implicated in the crashes that killed a total of 346 people on the two planes. While regulators are poised to start flight testing that fix soon, it still isn't clear when the MAX will be back in service.

Airbus largely sidestepped Boeing's woes and pressed ahead with the launch of a new long-range version of its A321 single-aisle plane designed to serve smaller markets, for example, on trans-Atlantic routes.

The European plane maker won 249 orders and commitments for the so-called A321XLR, giving it an edge over Boeing, which is considering building a competitor jet. Airbus's deals included an order for 50 jets from American Airlines Group Inc., providing Airbus with an early endorsement for its plane from an important customer. JetBlue Airways Corp. on Thursday agreed to take 13 of them.

Boeing's Mr. Mounir said the company was, for now, focused on the MAX, not a new plane.

Overall by Thursday, Boeing had taken less than half the 500-plus orders it took at the previous Paris Air Show. Airbus had secured 159 firm orders, roughly similar to the last outing.

Both plane makers are grappling with weaker demand for jets, neither secured any orders for their largest, flagship airliners at the show.

Global trade tensions that have dented airfreight demand and falling airline profitability have also contributed to a more modest pace of plane sales at this year's show compared with recent years.

Plane orders in previous years had gotten ahead of demand which the market is now adjusting for, said Warren East, chief executive of British aircraft engine maker Rolls-Royce Holdings PLC.

Still, Airbus and Boeing executives insisted long-term demand for jetliners remained healthy. Boeing, at the show, projected 20-year demand from airlines for 44,040 jets valued at $3.1 trillion for all plane makers.

Write to Robert Wall at robert.wall@wsj.com and Andrew Tangel at Andrew.Tangel@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
AIRBUS SE -1.45% 122.62 Real-time Quote.46.05%
AIRBUS SE -1.31% 123.08 End-of-day quote.46.96%
AIRBUS SE 0.00%End-of-day quote.0.00%
BOEING COMPANY (THE) 0.00% 330 Delayed Quote.3.18%
BOEING COMPANY (THE) 0.45% 356.01 Delayed Quote.10.39%
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Financials (USD)
Sales 2019 85 484 M
EBIT 2019 4 136 M
Net income 2019 3 378 M
Debt 2019 11 625 M
Yield 2019 2,24%
P/E ratio 2019 61,0x
P/E ratio 2020 14,7x
EV / Sales2019 2,48x
EV / Sales2020 1,69x
Capitalization 200 B
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Mean consensus OUTPERFORM
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Average target price 415,05  $
Last Close Price 356,01  $
Spread / Highest target 40,4%
Spread / Average Target 16,6%
Spread / Lowest Target -18,5%
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Dennis A. Muilenburg Chairman, President & Chief Executive Officer
Jenette E. Ramos Senior Vice President-Supply Chain & Operations
Gregory D. Smith CFO, EVP-Corporate Development & Strategy
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Gregory L. Hyslop CTO, Senior VP-Engineering, Test & Technology
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BOEING COMPANY (THE)10.39%200 330
AIRBUS SE46.05%106 201
TEXTRON-2.46%9 911