Starting this Monday (July 18), manufacturers such as Airbus and Boeing will be presenting their products in Farnborough, south-west of London, in the UK, and vying for orders. In view of climate change, the topic of CO2 savings is also high on the agenda. 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.
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.
Industry experts doubt that the order fireworks will be as big 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.
In the mass business with short and medium-haul jets, Airbus has long since left the former market leader Boeing behind. 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”.
The group aligns production with the number of engines supplied by the manufacturer CFM, said the head of Boeing’s commercial aircraft division, Stan Deal, on Sunday in London. Missing engines are currently the biggest limitation. Another version of the CFM engine of the 737 Max is also used in about every second Airbus A320neo.
Like the demand for short and medium-haul flights, the need for the corresponding aircraft is also recovering first from the corona pandemic. Boeing would also 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.
Meanwhile, demand for large long-haul jets 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 US group expects a greater need for new jets in the next ten years than recently. In the period from 2022 to 2031, around 19,575 new passenger and cargo planes should find their way to their customers, Boeing said on Sunday night. This means that the forecast demand is somewhat higher than that forecast for 2021 for ten years – although Boeing had calculated 710 aircraft for Russian airlines. The manufacturer is now writing off Russia as a sales market for itself, said Darren Hulst, head of marketing for Boeing’s commercial aircraft division, with a view to the sanctions against the country for its attack on Ukraine.
Looking at the 20 years to 2041, however, the manufacturer expects less demand for new machines than before. For example, Boeing is assuming global demand for around 41,170 passenger and cargo planes over the next two decades. A year ago, management had expected 43,610 pieces. Boeing based its forecasts on lower global economic growth and a more saturated aviation market for the second decade.
Unlike Boeing, Airbus anticipates greater demand for new aircraft over the next 20 years than recently. In its market outlook published a few days ago, the world’s largest aircraft manufacturer predicted sales of 39,490 aircraft for the industry by 2041, 470 more than last year’s forecast for the period up to 2040.
Airbus and Boeing are apparently waving orders for hundreds of aircraft
According to insiders, the aircraft manufacturers Airbus and Boeing can expect orders for hundreds of aircraft at the air show in Farnborough, UK. Major orders from the US airline Delta Air Lines, the German holiday airline Condor, the Polish airline Lot and Malaysia Airlines are expected, according to the Bloomberg news agency before the trade fair, which begins this Monday. The event is the first major industry gathering since 2019. In the past two years, the world’s largest trade fairs have been canceled due to the corona pandemic. They usually take place in Farnborough, south-west of London, and in Le Bourget, near Paris.
US airline Delta is likely to order 130 examples of Boeing’s 737 Max 10 medium-haul jet after several years of negotiations, Bloomberg reported. According to the price list, the order would have a total value of around 17.5 billion US dollars (17.3 billion euros). However, high discounts are common when purchasing aircraft.
The order is not without its explosive nature, as the long version of the Boeing 737 Max is still awaiting approval. If the US regulators do not wave the jet through by the end of the year or grant a delay, the US company 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 the US 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.
Delta is also likely to buy from the European manufacturer Airbus, albeit to a lesser extent. According to insiders, an order for twelve copies of the smallest Airbus jet, the A220, is being discussed there.
According to Bloomberg insiders, Airbus is also negotiating the purchase of around 30 A330neo wide-body jets with a list price of more than $10 billion. In addition, the Polish airline Lot could order 60 small Airbus A220.
An order from Germany is apparently also in the works: the holiday airline Condor is negotiating the purchase of 40 Airbus jets from the A320neo model family, reports Bloomberg, citing people familiar with the matter. Airbus has also developed a long-haul version of the long version A321neo under the name A321XLR, which completed its maiden flight in June and is scheduled for delivery in early 2024. Airbus declined to comment on the information about the orders. Condor also declined to comment.
Further orders are still being negotiated down to the last minute. Indian airline Jet Airways was mentioned here, which is also in talks with Brazilian manufacturer Embraer (Embraer SA), and Moroccan company Royal Air Maroc.
New orders are particularly important for Boeing. The US group has fallen well behind Airbus in the mass business with medium-haul jets. In the past ten years, the European aircraft manufacturer has increased its market share in this area to almost 70 percent, after the two manufacturers had previously combined half of the demand there. In their market forecasts for the next 20 years, both companies assume that around three quarters of all aircraft deliveries will be made up of these narrow-body aircraft with an aisle between the seats.
At times, the Airbus share rose by 0.4 percent to EUR 104.20 on XETRA. In pre-market US trading on the NYSE, Boeing shares temporarily rose 2.71 percent to $ 151.74 on Monday.
/stw/he
FARNBOROUGH/LONDON (dpa-AFX)
Leverage must be between 2 and 20
No data
More news about Airbus SE (ex EADS)
Image Sources: Jordan Tan / Shutterstock.com