An employee works at the assembly site of the Airbus A350 in Colomiers near Toulouse, in southwestern France, on December 9, 2022.
Valentine Chapuis | AFP | Getty Images
A lot has changed in the four years since one of the largest air shows in the aviation industry was held in person.
The Covid-19 pandemic devastated demand for travel, the airline industry laid off thousands of veteran workers, and the roller coaster hunger for new jets wreaked havoc on new aircraft production rates.
After all that, the Paris Air Show — a trade event where companies get a chance to showcase new technology, commercial and military jets and close deals — returns Monday amid a surge in demand for air travel, with airlines hungry for jets to to feed. . The question is whether BoeingAirbus and their numerous suppliers can catch up.
“That puts pressure on order books — creating upward momentum in used aircraft leasing rates and forcing airlines to compromise,” said Andy Cronin, CEO of aircraft leasing company Avolon.
Aviation analytics firm IBA estimated last week that there could be orders for about 2,100 planes at the show as airlines replace older planes and prepare for future growth in air travel.
Last year, Boeing has registered large orders or preliminary agreements from customers, including United Airlines, Saudia and the new Saudi airline Riyadh Air. Air India’s massive order earlier this year included both Boeing and Airbus jets.
Turkish Airlines’ chairman told reporters last month that the airline plans to order about 600 aircraft, both wide-body and narrow-body aircraft. The order would be the largest ever for a single airline, though it’s not clear if that will come through in time for the show.
IBA’s chief economist, Stuart Hatcher, said so in a June 15 forecast Delta Airlines, Malaysia Airlines and Air France-KLM could be buyers, but the timing is not yet certain. Air Baltic could also look at expanding its Airbus A220 fleet, he said.
“Given the political climate, it may be too early to call off Chinese expansion, but I wouldn’t be surprised if upgrade orders come in,” Hatcher wrote.
The biggest challenge for manufacturers now is to increase production. Slots for narrow-body jets, such as Boeing 737s and Airbus A320s, have been sold out for years. With long-haul travel returning, some airlines may also consider expanding their fleets with larger long-haul aircraft.
But customers around the world have been forced to wait longer than expected for new planes as Boeing, Airbus and a web of suppliers around the world try to ramp up production. That has limited airline capacity, which keeps airfares high.
Alan Joyce, CEO of Qantas, told CNBC last week that he expects supply chain problems to persist until 2025.
Boeing and Airbus are doing everything they can to increase production in the coming years to meet that demand.
The production slowdowns have also pushed up leasing rates for both new and older aircraft, as airlines look for other opportunities to boost flights.
New Boeing 737 Max 8 aircraft will be leased in July for about $350,000 a month, up from $305,000 in January 2020 when the pandemic began, IBA estimates. New Airbus 320s will cost $355,000, up from $325,000 in that period. Older versions are close to pre-pandemic levels.
“People just want their jets,” said Richard Aboulafia, general manager of AeroDynamic Advisory.