Farnborough Airshow: Aviation Industry Hopes for Uptick Amid Economic Uncertainty

The world's premier aerospace event, Farnborough Airshow, is set to kick off this week, with industry leaders eyeing a potential turnaround in the aviation and defense sectors. Boeing's debut of its long-awaited 787 jet, already more than two years overdue, has sparked hopes that the industry's two-year downturn is nearing a bottom. Meanwhile, Bombardier is likely to announce at least one new order for its C-Series plane at the show, putting pressure on Boeing and Airbus to upgrade their own narrow-body airplanes.

Key Takeaways:

• Boeing's 787 jet, despite being two years overdue, is seen as a game-changer for the industry, with Boeing CEO Jim McNerney claiming it will be "the way planes are going to be built for the next 80 years."
• Bombardier is expected to announce a new order for its C-Series plane at Farnborough, potentially sparking a wave of upgrades among Airbus and Boeing's narrow-body aircraft.
• The show's commercial plane orders are likely to be restrained, with activity focused on buyers from emerging markets in the Middle East and Asia.
• Industry analysts expect the event to be more upbeat than 2009's Le Bourget show, but not as robust as the $88.7 billion worth of orders announced in 2008.
• The International Air Transport Association has forecast a $2.5 billion industry profit this year, a significant turnaround from the $9.4 billion loss in 2009.
• Asia and North America are expected to lead the industry's recovery, while Europe lags behind due to strikes, debt crisis, and volcanic ash cloud disruptions.
• Qatar Airways, Emirates airline, and other major buyers are set to participate in the show.

Statistics:

• 90 C-Series orders secured by Bombardier over the last 16 months, with 90 options.
• List prices for the C-Series planes range from $50 million to $77 million.
• 60 active "campaigns" or ongoing talks with potential customers being pursued by Bombardier.
• $88.7 billion (U.S.) worth of commercial plane orders announced at Farnborough in 2008.
• $2.5 billion forecast industry profit this year, according to the International Air Transport Association.
• $9.4 billion industry loss in 2009.

Sources:

• Bloomberg: "Boeing's 787 Gets Farnborough Debut Amid Weaker Demand" (no date)
• Farnborough Airshow: "Boeing to Make Commercial Aviation Re-Entry at Farnborough" (no date)
• 2010 Toronto Star: "Aviation industry hopes for uptick amid economic uncertainty" (no date)
• Forecast International: "Aerospace & Defense Market Brief" (no date)
• International Air Transport Association: "Global Air Transport Industry Outlook" (no date)