Status: 07/18/2022 09:28 a.m
Starting today, Airbus and Boeing are vying for orders at the Farnborough Air Show in the UK. Experts expect fewer orders than usual: Are not only airlines but also aircraft manufacturers in crisis?
From today, manufacturers such as Airbus and Boeing will be presenting their products and bidding for orders in Farnborough, UK, south-west of London. At the first major air show since the outbreak of the corona pandemic, experts expect a certain reluctance to order aircraft, unlike before the crisis.
In the past two years, the world’s largest aviation trade fairs have been canceled due to the pandemic. The Farnborough Airshow alternates annually with the Paris Aérosalon at Le Bourget Airport. Manufacturers traditionally try to outdo each other by announcing new orders at trade fairs.
The major aircraft manufacturers are expecting strong demand for passenger and cargo jets again in the coming years. Farnborough could show a bit how the US company Boeing, which has been stricken by many problems, is doing compared to the world’s largest aircraft manufacturer Airbus from Europe.
Less orders
However, industry experts doubt that the fireworks of orders will be as great this time as in the past. In the years 2015 to 2019, the manufacturers announced an average of around 800 orders at the summer trade fairs, writes aviation analyst Ken Herbert from the Canadian bank RBC. According to his colleague Sheila Kahyaoglu from the analysis firm Jefferies, there are currently about as many orders in the works. These would probably not all be announced at the fair.
RBC analyst Herbert expects orders for around 500 aircraft. According to Kahyaoglu, the US airline Delta could order more than 100 Boeing medium-haul jets of the type 737 Max as well as examples of the smallest Airbus jet, the A220. Airbus had already announced large orders from Chinese airlines for almost 300 machines at the beginning of July – these deals are therefore not included in the trade fair balance sheet.
Demand remains high
Even if the situation may be a bit tense at the moment: in the medium term, Boeing expects the global aircraft fleet to almost double by 2041. Darren Hulst, Boeing’s vice president of commercial marketing, said ahead of the show: “Overall, we’re still looking at late 2023, early 2024 as when the industry will recover fully, or at least to pre-pandemic traffic levels.” Despite recession risks, Boeing sees strong near-term demand for aircraft. Worldwide, 41,170 new aircraft are expected to be needed in the next twenty years.
However, Boeing had expected 43,610 units a year ago. Boeing based its forecasts on lower global economic growth and a more saturated aviation market for the second decade. The forecast for the competitor Airbus is similar: by 2041, the European aircraft manufacturer estimates the need for 39,490 passenger and cargo aircraft.
Airbus is ahead
In the competition with Boeing, Airbus is currently ahead, because Airbus has left the former market leader Boeing behind in the mass business with short and medium-haul jets. In the past ten years, the European manufacturer has secured a market share of almost 70 percent in this segment. The success is mainly due to the modernized new edition of the A320 model family under the name A320neo, which consumes significantly less fuel than its predecessor.
For Boeing, however, the modernization of the aging competitor model 737 turned into a disaster. After two crashes that killed 346, the Boeing 737 Max was not allowed to take off worldwide for more than a year and a half. Only since the jet was revised have the bans been gradually lifted since November 2020. Boeing is still suffering from the aftermath today.
While Airbus has already increased production of the A320neo family to around 50 jets per month after the crisis and is aiming for a record production of 75 per month for 2025, Boeing recently had only 31 machines for the “Max”.
Problems with the 737 Max 10
Boeing would like to launch the long version 737 Max 10. But their approval is dragging on. If the US regulators do not wave the jet through by the end of the year or grant a delay, Boeing is threatened with the expensive introduction of a completely new cockpit warning system due to a change in the law in 2020.
Without an agreement with Congress, Boeing could be forced to discontinue the 737 Max 10, Boeing boss Dave Calhoun told the industry journal Aviation Week a few days ago. According to division head Stan Deal, Boeing does not think it is very likely that this drastic step will take place.
With the “Max 10” Boeing competes against Airbus’ bestseller A321neo, the long version of the A320neo. For a long time, this has accounted for the majority of new orders in the narrow-body aircraft segment among Europeans. Airbus has also developed a long-haul version of the machine, called the A321XLR. It is scheduled to go into scheduled service in early 2024.
Long-haul jets less in demand
Demand for large, long-haul jets meanwhile is sluggish, except in the cargo segment. Both manufacturers had reduced the production of the large machines particularly severely due to the slump in demand during the pandemic. But while Airbus continues to deliver its A350 and A330neo types, Boeing only does this with the older 777 model.
The manufacturer even had to postpone its new edition 777X to 2025. And he has not been able to deliver the smaller Boeing 787 “Dreamliner” for about a year due to production problems. The talks with the US aviation authority FAA to resume deliveries are very advanced, said Boeing manager Deal on Sunday, but gave no timetable.
Meanwhile, the manufacturer is now writing off Russia as a sales market, said Boeing marketing manager Hulst. The background are the sanctions against the country because of its attack on Ukraine.