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Showcasing industry futures

August 5, 2014

Global air shows in Paris, Farnborough and Dubai are more than just breaking numerical barriers and making headlines

The end of the 2014 Farnborough Air Show saw deals, orders and commitments amounting to some $201 billion — a record for the show.

Rewind nine months ago, the 2013 Dubai Airshow racked up deals totalling some $206.1 billion — again, another record for this particular event.

The numbers involved are staggering when you look at them. But then, the numbers also indicate the health, strength and resilience of the wider global aviation market — both for commercial aerospace and in defence. Both sectors are vibrant and robust and even with defence cut backs from a swathe of governments, there is still plenty of money sloshing around the world to make big deals happen.

Indeed, last week, US Air Force General Michael Hostage spoke of a sixth generation fighter to enter service after the F-35, which still itself is yet to enter active service. So technological progression is already a key factor for military development where billions of dollars are invested and the rewards thereafter are equally in huge numbers too.

"I talk about providing that environment in which the human sitting in a box on the ground would have the same kinesthetic awareness of the aviator sitting in a platform in the middle of a combat environment," Hostage told the Stars & Stripes website.

"The day will come when I can produce that, and if that day comes, I am happy to stop flying manned aircraft. That day is not here yet… but I think it will happen," he added.

It will be a long time before that sort of ground-breaking technology reaches commercial airplanes, but with demand for air travel soaring and Boeing last week forecasting a need for some 1.1 million new pilots and technicians, eventually farther down the aerospace line, commercial airplanes will undergo big changes too.

Whether that's single pilot or full automation — that's for future history, but it is evident that the big three global air shows in Paris, Farnborough and Dubai are more than just breaking numerical barriers and making headlines.

Events like Farnborough also showcase the future of the industry and the promise of what will come tomorrow. Just as the 777X launch in Dubai was a monumental deal for Boeing (and of course the Dubai Airshow itself along with Emirates' massive order), the Farnborough Air Show lauded the Airbus team for launching the much-expected, but less radically advanced A330neo family.

Without wanting to drop both shows into some sort of contest with each other, it's only fair to remember that Dubai is, in my mind, the more strategic and important show in the global air show calendar because of the sheer explosive double-digit traffic growth in and around the GCC. That's why it garnered more business than Farnborough (in dollar terms).

Equally, the launch of the 777X is something of an industry rarity. As of writing, All Nippon Airways finalised its deal for 20 Boeing 777-9Xs. This takes the total 777X order book to 286 firm units since the Dubai Airshow launch in last November.

The 777X has racked up more orders in less time than it takes a woman to have a healthy baby. And if you compare this sales performance with the current hot-selling 777-300ER, that airplane took almost seven and a half years to amass 281 orders from its launch back in February 2000.

When you look at the numbers like that, it is little wonder that Boeing sees a huge market for 777X and one that will likely relegate the A350-1000, which Emirates cancelled, in the same way that the 777-300ER cast aside the gas-guzzling A340-600. The A330neo, however, had orders that most likely came out of the dwindling existing backlog and will struggle to gain market traction in the longer term since many airlines that have waited patiently for their 787s will likely not want to induct a less fuel efficient jet just for the sake of it. While the A330neo will improve fuel burn economics over the existing and ageing A330 family, it will still be significantly inferior to the 787 — in terms of performance, longevity, maturity and long term asset value too.

When you see leasing giants like AerCap, ALC, GECAS and others all stepping in for their inevitable 777X buys, then you can really affirm that the market for new and leased jets is really taking off at the upper end of the seating map. It will be interesting to see just what sort of business the next major show at Le Bourget brings in 2015. By that time, the skies will have more than a couple hundred 787-8s and 787-9s flying high — along with a good batch of A350-900s too.

Defence pressures, airlines still chasing new efficient jets like the A320neo and 737MAX will of course be order of the day and the Bombardier CSeries will continue to limp towards irrelevance as it seeks 300 firm orders before entry into service — given the string of delays already, they'll get their 300 orders by delaying the ailing jet just that little bit more!

The calendar is littered with fringe air shows. The strength of the 2013 Dubai Airshow and this summer's Farnborough Air Show demonstrate that the aviation industry has learned to adapt with the dizzy-height numbers that make glossy media headlines.

And it is with this in mind that the GCC will continue to lead the world in aviation growth, despite regional turmoil because of the buoyancy that demand here has.

Those critics looking to prod the needle into the so-called Middle East "bubble" are guaranteed more disappointment in this regard. Just as air shows are here to stay, so too is the critical GCC regional and international importance when it comes to piecing together the global aviation jigsaw.

The writer is chief analyst at ?London-based StrategicAero ?Research.

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Source: Khaleej Times (United Arab Emirates)

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