PARIS 2019 BLOG: A quiet opening to what could be a quiet week
The Paris Air Show has opened with no surprises and relatively few new airliner orders. This will likely be the pattern for the week.
With record order backlogs, especially for narrowbodies, Airbus and Boeing were already in a mode of focusing more on production rates and deliveries as they headed into Paris. The Boeing 737 MAX grounding further dampened the environment for large check-book signings in the Paris chalets.
For show day one, June 17, airliner new orders and commitments totaled a relatively puny 38 firm orders and 100 commitments. Of these, Airbus accounted for 118 and Embraer for 20; Boeing did not announce any new orders.
As expected, Airbus launched the 4,700nm-range A321XLR with a small order of four from Middle East Airlines and a weightier LOI for 50 from Air Lease Corp. There’s a growing appetite for these longer-range, highly-efficient narrowbodies that provide widebody economics and allow airlines to add frequencies in strong markets, keep some markets going year-round where they might otherwise be summer-only routes, and launch long, thin point-to-point destinations with less risk.
In other, happier circumstances, Boeing might have countered with a slew of orders for the larger MAX variant or even launched the new midmarket airplane (NMA), but for Boeing, this is not the time or place.
Boeing execs, of course, arrived at Paris knowing this would be a different, subdued show for the company. They had something of a preview just just two weeks earlier at the IATA AGM in Seoul, where the world’s airline CEOs meet. A record 350 international journalists attended this year’s AGM—and many of them focused their questions on the MAX grounding.
So it continues at Paris, with the MAX questions being re-asked.
Nevertheless, Boeing issued its updated 20-year commercial market forecast and gave a confident outlook for a $6.8 trillion market that continues on a growth trendline despite international trade disputes.
The other continuing trendline for airshows is the strength of the commercial aftermarket and services business, now as important to Airbus and Boeing as it is to the engine suppliers and MRO specialists.
Multi-million-dollar service and support contracts may not be as sexy to announce at an airshow chalet as a new order for airliners. But they are part-and-parcel of what happens after the shiny new airplane is delivered and how the industry will grow.
Karen Walker email@example.com