Aviation chiefs head to Farnborough in buoyant mood, despite economic headwinds

Defying supply woes and climate concerns, the first airshow since 2018 could see plane buyers go on a spending spree

Farnborough has seen its share of aviation firsts. It was the site of the UK’S first powered flight, and of the public debuts of planes from Concorde to fighter jets. But the biennial airshow notched up an unwelcome first in 2020, when it was cancelled after an unbroken 70-year run – a symbol of the turmoil in the aviation industry caused by coronavirus.

It has been a chastening two years for the executives heading back to the Hampshire town this week. Yet for an industry that struggled as much as any during and after lockdowns, the mood among bosses sweltering in England’s record heat is likely to be more upbeat than they would have dared hope in the dark days of 2020.

Sheila Kahyaoglu, equity analyst at investment bank Jefferies, thinks aircraft buyers could go on an “order bender” at the show. An average of 670 planes were ordered per Farnborough over the past decade, but according to her calculations, 800 potential sales are already in the pipeline.

Boeing has so far announced 286 new orders between January and June, but Airbus is already on 442, before a potential 300-plane purchase from Chinese airlines that would give it a commanding position in the world’s second-largest aviation market.

Boeing logo on building
Boeing says orders are strong, with customers needing more than 40,000 new planes in the next two decades. Photograph: Reed Saxon/AP

Despite the chaos as airports around the world struggle to return to normal service, the industry is convinced that huge growth is ahead. Boeing says airlines and freight companies will need 41,170 new planes over the next 20 years. Airbus recently increased its forecast from 39,490.

Boeing’s estimate is about 140 planes a year fewer than it predicted in 2019, before Covid and before the extent of the crisis over its 737 Max model became clear after two deadly crashes. However, after replacing retired aircraft, 41,000 new planes would represent a near-doubling of its global fleet, which was at 25,900 in 2019. The China and Asia-Pacific regions will account for two in five orders, Boeing believes.

If planemakers take a confident tone, it will be in marked contrast to current commentary on the global economy. Inflation is becoming an acute problem in much of the world, and aid agencies fear mass hunger. Russia’s invasion of Ukraine has bolstered the prospects of aerospace and defence manufacturers, which benefit from higher weapons spending.

“The momentum of recovery tends to be the major driving force in demand for air travel,” Darren Hulst, Boeing’s vice-president of commercial marketing, told journalists last week. “Really demand is not the constraint any more. As customers are able to travel, we’re seeing a tremendous amount of pent-up demand.”

But supply is the major problem. Boeing is racing to gain regulatory approval for longer and shorter variants of the 737 Max before an end-of-year deadline and avoid costly safety upgrades. Airbus is trying to up its production rate, causing grumbles from struggling suppliers.

As with any aerospace event, the question of sustainability lurks. The industry regularly reminds anyone who will listen that planes are responsible for only about 3% of global carbon emissions, but aviation is among the hardest sectors to decarbonise. Solutions range from unconvincing – “sustainable” aviation fuel is so far not sustainable – to completely unproven – alternative types of propulsion such as hydrogen or electric motors have barely made it into the sky.

But with meaningful emissions regulation appearing distant, those qualms are unlikely to upset the mood of the industry as our insatiable demand for air travel – and the growing Asian middle class – mean it can look forward to booming sales.


Jasper Jolly

The GuardianTramp

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