Sat | Jun 20, 2026

Aviation industry more optimistic

Published:Tuesday | July 20, 2010 | 12:00 AM
A Boeing 787 Dreamliner lands, for the first time outside the United States, at the Farnborough International Airshow, Farnborough, England, Sunday, July 18. Deliveries of the long-range passenger jet to the first Japanese customer have been delayed by more than two years due to production problems. Boeing executives have said they aim to deliver the first Dreamliner to Japan's All Nippon Airways by the end of 2010, but they have cautioned that the delivery could be delayed to early 2011. - ap

Boeing Company and European arch- rival Airbus racked up billions of dollars worth of aircraft sales at the Farnborough International Airshow on Monday, raising hopes that the aviation industry has touched the bottom of a deep two-year downturn.

But the horizon remains clouded - major European airlines, which are still haunted by recession, mostly kept their hands in their pockets as Middle Eastern carriers and United States (US) plane-leasing firms made purchases to build up their fleets.

The optimism also is not extending to the defence side of the sector where massive cuts to Western military budgets were the talk of the industry's premier event.

The early orders, worth a total of US$17.7 billion, included an Emirates deal to buy 12 Boeing 777-300ER jetliners, worth US$3.6 billion at list prices.

Boeing also received a US$3 billion order from GE Capital Aviation Services for 40 737-800s.

EADS-owned Airbus picked up a US$4.4 billion order from Air Lease Corp for 20 A321 aircraft and 31 A320s, a US$4.9 billion order from GECAS, General Electric's commercial aircraft leasing arm, for 60 A320s.

Russian flag carrier, Aeroflot, the only European airline to buy on Monday, ordered 11 of Airbus' A330-300 aircraft, worth US$1.7 billion.

Canada's Bombardier, a rising challenger to established giants like Airbus and Boeing, received an order for three business jets from Qatar Airways in a deal worth US$122 million.

The biennial gathering at an airfield outside London - bringing together plane makers, airlines, government officials and military top brass - is considered by industry watchers a key test of the industry's health.

More than 1,000 exhibitors from 38 countries have signed up for Farnborough, with delegations from Egypt, Taiwan and Morocco attending for the first time. Organisers also cited stronger interest from major players China and Russia.

"We're gradually starting to see a slow recovery to a new norm," Owen MacFarlane, CEO of CAV Aerospace, told the AP from his exhibition stand at the show.

"So maybe it's not the same volumes as we saw in 2007 and 2008, but certainly an increase from where we have been," he said, noting he cut 25 per cent of his workforce over the past 18 months. "Everybody seems a lot more buoyant."

Analysts don't expect anything close to the record-breaking US$88.7 billion worth of deals announced in Farnborough in 2008, but the gathering has already exceeded the slow orders for commercial planes at Le Bourget last year, where deals came in at around US$7 billion.

The International Air Transport Association has forecast that global industry profits will reach US$2.5 billion this year, an upturn from the huge US$9.4 billion loss in 2009.

Asia and North America are expected to lead the recovery, with Europe lagging behind.

Strikes at some airlines, the debt crisis and the volcanic ash cloud that caused major disruptions this spring are all hurting Europe's recovery.

Analysts will also be watching for developments in the bitter Boeing-Airbus battle to win a US$35 billion contest to provide aerial tankers to the US Air Force.

The World Trade Organization ruled earlier this month that European governments gave Airbus illegal subsidies for the project.

The show runs July 19-25 at an airfield about 30 miles (50 kilometres) west of central London.

AP