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9/1/2018 | 2 MINUTE READ

Brexit and US/China trade war aside, aeromarket to surge

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In the lead-up to the 2018 Farnborough International Airshow (held July 16-22 in Farnborough, UK), aerospace industry pundits were asking a lot of worried questions. But when the show started, none of that seemed to matter in the light of OEM market predictions.

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In the lead-up to the 2018 Farnborough International Airshow (held July 16-22 in Farnborough, UK), aerospace industry pundits were asking a lot of questions. Not the least were those centered around how the UK’s impending exit from the European Union will affect the global aviation supply chain? More questions surfaced in the wake of the more recent rise of the US/China trade war and impositions of tariffs, about what effect these might have on aircraft deliveries? How will aircraft manufacturers, they wondered, respond to increasing production and delivery pressures, and potential supplier-related delays and/or price increases? None of that seemed to matter following the first days of the show, given the enormity of the industry numbers that emerged. According to Farnborough’s organizers, on the show’s first day alone, US$46.4 billion in deals were announced, surpassing the previous high first-day figure, in 2016, of US$23 billion, with orders placed for 311 civil aircraft across the show. More than US$2.8 billion (USD) in engine orders also were announced on that day, said show officials.

The Boeing Co. (Chicago, IL, US) announced first-day orders from eight airline or cargo customers, and Airbus (Toulouse, France) also reported eight major orders. These, of course, add to existing production backlogs for each, which are straining both OEMs in terms of meeting delivery commitments.  One Airbus customer, a new US airline start-up, announced a commitment for 60 Airbus A220-300 aircraft to serve its “skinny” routes, with deliveries to begin in 2021 (the A220-300 is the former Bombardier C-Series, the regional jet program in which Airbus acquired a majority interest in October 2017 (see endnote). The new airline is backed by a group of investors led by JetBlue (New York, NY, US) founder David Needleman. Boeing meanwhile secured multi-billion-dollar commitments for cargo planes from several operators, to help meet the burgeoning growth of the cargo industry that continues to improve after the 2007-2008 economic slump.

Boeing also released its Commercial Market Outlook on the show’s first day. In it, the company says that over the next two decades, demand for new airplanes and commercial services should reach US$15 trillion, which translates to 42,700 planes, with a value of US$6.3 trillion. To meet projected cargo traffic, 980 new freighters and 1,670 freighter conversions will be needed. More than 8,000 new widebody jet will be needed (US$2.5 trillion) as well as single-aisles with a value of US$3.5 trillion. All in all, the aerospace market, if these figures hold up in what appears to be a more changeable, and therefore, less stable and easy to predict economic landscape, the aerospace industry seems certainly to be on a growth trajectory.

For background on the Airbus/Bombardier CSeries transaction, visit the following Web http://short.compositesworld.com/A220-300destinations and read:

“Airbus to acquire majority stake in Bombardier's CSeries” | http://short.compositesworld.com/AirbusCSershort.compositesworld.com/AirbusCSer

“Airbus introduces A220 aircraft family” | short.compositesworld.com/A220-300

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