June 23, 2024

Balkan Travellers

Comprehensive up-to-date news coverage, aggregated from sources all over the world

menu icon

The Paris Airshow returns as Boeing and Airbus race to ramp up production

  • The Paris Air Show returns Monday after a four-year hiatus during the pandemic.
  • An aviation analytics firm predicts that there could be 2,100 aircraft orders during the show.
  • Meanwhile, Boeing and Airbus are racing to ramp up production to meet strong demand.

An employee works at the Airbus A350 assembly site, in Colomiers near Toulouse, southwest France, on December 9, 2022.

Valentine Chapuy | AFP | Getty Images

A lot has changed in the four years since one of the aviation industry’s biggest air shows took place in person.

The Covid-19 pandemic has devastated the demand for travel, the airline industry has dumped thousands of experienced workers and a roller coaster appetite for new planes has wreaked havoc on new aircraft production rates.

After all, the Paris Air Show—a trade event in which companies get a chance to showcase new technology, commercial and military aircraft, and strike deals—returns Monday during a surge in demand for air travel, as airlines starve to feed. . The question is whether Boeing and Airbus and their many suppliers can catch up.

“This creates pressure on the order books – it creates upward momentum in used aircraft leasing prices and forces airlines to make concessions,” said Andy Cronin, CEO of aircraft leasing Avolon.

Flight analytics firm IBA estimated last week that there could be orders for about 2,100 aircraft during the show as airlines replace aging planes and prepare for future growth in air travel.

Over the past year, Boeing has recorded large orders or preliminary agreements from customers including United Airlines, Saudia and new Saudi carrier Riyadh Air. Air India’s huge order earlier this year included both Boeing and Airbus aircraft.

See also  Why did the US economy shrink in the first quarter of 2022

The head of Turkish Airlines told reporters last month that the company plans to order about 600 aircraft, both wide-body and narrow-body. Demand would be the largest ever for a single airline, though it’s not clear if that will meet in time for supply.

IBA chief economist Stuart Hatcher wrote in a forecast released on June 15 that Delta Air Lines, Malaysia Airlines and Air France-KLM could be buyers, but the timing is not yet certain. He said Air Baltic might also look to expand its fleet of Airbus A220s.

“It may still be too early to call any Chinese expansion just yet given the political climate, but I wouldn’t be surprised to see top-up requests,” Hatcher wrote.

The main challenge for manufacturers now is to increase production. The slots of narrow-body jet aircraft, such as Boeing 737s and Airbus A320s, have been sold for years. Now that long-haul flights are back, some airlines may also be looking to expand their fleets of large, long-haul aircraft.

But customers around the world have had to wait longer than expected for new planes as Boeing, Airbus and a worldwide network of suppliers try to ramp up production. This has resulted in limited airline capacity, making airfares high.

Qantas CEO Alan Joyce told CNBC last week that he expects supply chain problems to continue into 2025.

Boeing and Airbus are scrambling to raise production rates for the coming years to meet this demand.

Production delays have also pushed up charter prices for new and old aircraft as airlines look for other opportunities to boost flights.

See also  Stock futures flat ahead of August's main jobs report

New Boeing 737 Max 8s are being rented for about $350,000 a month in July, up from $305,000 in January 2020 as the pandemic began, according to IBA estimates. The new Airbus 320s will go for $355,000, up from $325,000 during that time. Older versions are close to pre-pandemic levels.

“People just want their planes,” said Richard Aboulafia, managing director of consultancy AeroDynamic.