A big fall in aircraft orders is expected at this year’s Paris Air Show

By C.R.

THE PARIS AIR SHOW, which began on June 17th, is the largest event of its type in the world. Aerospace and defence firms flock to Le Bourget to show off their wares to potential customers, and to rack up orders for the future. The last few shows have been money-spinners for commercial-aircraft makers, particularly Europe’s Airbus and America’s Boeing, the two firms that between them make almost all the world’s large jetliners. At the last air show, in 2017, orders for civil aircraft worth $115bn at list prices were made. The one before that, in 2015, was almost as bountiful, with $107bn in orders. This year expectations are much lower. Nonetheless, analysts expect the two giants to be doing well even with orders at a fraction of the level of previous years. Why?

Boeing had hoped to be very busy in Paris this week. It was expected to launch the 797, a new mid-sized jet to fill the gap in its range between its smaller 737 narrow-body airliner and its much larger 787 and 777 wide-body jets. But now all bets are off. Boeing is likely to have a low profile at Paris. Its chief executive, Dennis Muilenburg, still has his tail between his legs over the indefinite grounding of the new Boeing 737 MAX—an aircraft said to produce a third of the firm’s revenues and profits—over safety worries, after two crashes in just five months killed 346 people. Mr Muilenburg will be spending much of his time trying to reassure airlines that, one day, the 737 MAX will fly again.

But that is by no means Boeing’s only problem. Its bigger aircraft are also in trouble. The new 777X, once expected to be at Paris, is stuck on the ground in America because of engine problems. And its flagship 787 Dreamliner has been branded by American regulators as a “risk to the flying public” owing to problems with a switch that activates fire-fighting equipment on board.

No wonder that Airbus, its arch-rival, is expecting a good air show. It is showing off five of its airliners in Paris, unlike Boeing which is able to display only one. The European aerospace giant is planning to launch the A321XLR, an aircraft designed to knock Boeing’s 797 out the sky. It is a simple adaptation of its popular A321neo aircraft and building it will therefore require only a fraction of the cost of developing the all-new Boeing 797. In theory, the new Airbus aircraft should also be more fuel efficient, as it has a much smaller cross-section than that proposed for the Boeing 797, so creating much less drag.

Beyond Boeing’s particular problems at this year’s show, some commentators will inevitably leap on a fall in overall sales to say something is going wrong in the market for commercial jets. Some analysts have already cited disappointing global air-passenger traffic growth in recent months as a reason behind the announcement on June 9th of a merger between United Technologies, an American conglomerate mainly involved in civil aviation, with Raytheon, an American defence contractor, in a deal worth over $120bn.

But a few disappointing months of traffic figures does not make an aviation recession. Many airlines are sitting on their hands as neither Boeing nor Airbus have any spare production slots available in the near term for their most popular planes. Both already have huge backlogs of orders to keep busy. The number of aircraft on Airbus’s orderbook will keep its assembly lines busy for over nine years at current rates of production; that number for Boeing is over seven. There is no need for either to panic about orders—yet.