Business News

CCTV Script 13/11/17

— This is the script of CNBC's news report for China's CCTV on November 13, Monday.

Right at the start of the 2017 Dubai Airshow, Dubai's Emirates airline unveiled a provisional $15.1 billion order for 40 of Boeing's 787-10 jetliners. According to a statement, deliveries will start in 2022.

This happens as a widely-anticipated deal destined to rescue Airbus, the European aircraft maker, stalled at the last minute. While the deal marks a victory for the US aircraft maker, which triumphed over Airbus's rival A350 mid-size jet offer, it also cast a shadow over the European group's mooted sale of at least 36 A380s to Emirates, also at an estimated value of $15bn. People with knowledge of the A380 discussions said Emirates appeared to have presented new demands on Sunday after an all-night negotiating session. However, they were still hopeful a deal could be struck, as the two sides continued talking.

If the Emirates order materialises, it would keep the world's largest passenger jet in production for a further decade. Without it, there will be questions over the future of the programme.

For the better part of a decade, the skies have grown increasingly hostile to jumbo jets such as Boeing's 747 and Airbus' A380. Now the fuel-efficient planes intended to replace those behemoths are also encountering resistance.

Earlier in September, United Airlines and Cathay Pacific Airways together have scratched 41 orders for the Airbus A350, a twin-aisle plane designed to carry about 370 passengers, leaving Airbus with only 171 orders for the model.

The problem is that jet fuel is cheap - $550 per metric ton, down 40 percent from 2014. At that price, it's profitable for an airline to continue operating older wide-body models that launched in the 1990s, such as the Airbus A330 and Boeing's original 777, and delay purchases of more efficient planes like the A350 - which has a fuselage and wings made from lightweight carbon fiber. Even if crude prices rebound, sales of the big jets might not fully recover, according to analysts. That's because airlines are shifting from channeling traffic through megahubs toward nonstop routes between second-tier cities using smaller twin-aisle planes.

[MARC ALLEN IV 1311] "New routes created. So these are new point to point opportunities have been opened up. You'll hear Kevin McCallister our commercial airplane CEO talk about how the efficiency and how the route optimization have come together to just radically change industry for our customers. So yes we feel like the strategy and the family more importantly is right where we want it."

While the market would evolve to favor direct flights and higher frequencies, airbus is taking actions.

"By bringing our partners in like Airbus. It's got an incredible footprint. They bring worldwide marketing and sales expertise to supplement what we're doing with our own team. They bring a worldwide customer network to support. Aircraft. And certainly down the supply chain side you know the advantages that that brings in terms of cost."

CNBC's Qian Chen, reporting from Singapore.