Farnborough Airshow 2018: what to expect and what not to
The countdown to the aviation industry’s flagship event – the UK’s biennial Farnborough International Airshow 2018 – has already begun, with the event taking off in only a week’s time, on July 16, 2018, at the Farnborough Airport (FAB) in England.
The Weekend Show for the general public is set to take place on July 21-22, 2018, but leading up to that, and most important for the industry, is the five-day Trade Show that will take place on July 16-20, 2018.
The trade event will be the platform for the aerospace industry to do business and the focus of many leading airlines, aviation companies, and plane and engine manufacturers from around the world.
Here is an overview of the most significant developments that transpired prior to the Show – the largest commercial and military aerospace trade fair of the year – and what can be expected to occur during the event.
Farnborough jet orders
Aviation consultancy IBA Group forecasts that global plane manufacturers could draw as much as 900 orders and commitments at the Farnborough Airshow, Reuters reports.
Some industry analysts are predicting a quieter airshow this year as the industry endures a record order backlog of more than 15,000 aircraft, spread across all types.
But, according to IBA, higher oil prices could prompt several airlines and lessors to add to the orders for fuel-efficient narrowbodies.
“Airlines have historically placed orders when times are good and cash is strong, much like today,” Stuart Hatcher, COO of the UK-based IBA Group, said in a report, which is the first detailed order forecast ahead of the event, obtained by Reuters.
According to Hatcher, since the financial crisis, the correlation between oil prices and aircraft orders has been “uncannily strong,” despite the negative impact of oil prices on airline profits.
On average, these summer shows account for 30% of annual commercial business, states IBA. For instance, at the 2017 Paris show, plane makers placed around 900 firm or provisional orders.
“In all, the order tally (firm and provisional) could top 900 again... but increasing costs for the airlines may prevent the order book rising by too much,” Hatcher states in the IBA report.
This includes a combined total of 600 Airbus A320neos and Boeing 737 MAXs, and a forecast of 100 widebodies. Small models and turboprops could also get a boost from rising oil prices, says IBA.
Leasing companies could also be buyers due to weakness in the sale-and-leaseback market. They are expected to place 40% of new orders at the event.
Bombardier’s CSeries at Farnborough
Airbus CEO Tom Enders said on July 4, 2018, that he expects to see the first results of the company’s new majority stake in Bombardier’s CSeries within weeks, around the time of the Farnborough Airshow.
As for the CSeries orders, Enders told reporters there might be something to see in time for the Farnborough event, but did not elaborate on whether this meant new firm orders for the jets, Reuters reports.
Trump’s team in for Farnborough
The U.S. is sending an official delegation to the Farnborough Airshow – the highest ranking to attend the show in years – in efforts to push the Trump administration’s “Buy American” agenda aimed at boosting weapon and aircraft exports, industry sources told Reuters.
The “Buy American” initiative aims to speed up arms deal approvals and increase the advocacy role of senior U.S. officials in closing foreign sales. The policy, officially named the Conventional Arms Transfer Policy, also loosens U.S. export rules on equipment ranging from fighter jets to warships.
Companies that stand to benefit most from the new policy include Boeing and the other top U.S. defense contractors, Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman.
Hence the U.S. delegation will be led by The White House trade adviser Peter Navarro, one of the main actors in the new policy. While the U.S. President will be in the UK the weekend before the Airshow, it is not likely he will attend.
However, The U.S. State Department’s Under Secretary for Arms Control and International Security Andrea Thompson will attend. The rest of the delegation will include officials from the Commerce Department, the Air Force and the Pentagon’s weapons export administration.
According to Reuters, it will not be the first time that the Trump administration has boosted its profile at an airshow. For instance, in February, 2018, the U.S. sent its diplomat responsible for foreign military sales to the Singapore Airshow to promote U.S.-produced weapons.
Russian delegation out of Farnborough
Russian companies will not attend the Farnborough Airshow due to strained relations between the two countries: the UK’s position on Russia and the related sanctions against the country, Russian news agency Interfax reported on July 5, 2018, citing state-owned conglomerate Rostec, which refused to participate in the Show, Reuters reports.
Earlier it was reported that the organizers of the Airshow – Society of British Aerospace Companies – prohibited Russia to exhibit its military products this year. Now, according to Russian Aviation news portal, Russia’s United Aircraft Corporation (UAC) will not attend the Show nor exhibit its civil aircraft there.
Russia had encountered difficulties with participation in Farnborough before. In 2014, the Russian delegation‘s entry visas to the UK were refused. In 2016, Rostec and several other companies brought only civil products to the exhibition, due to sanctions.
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