Aviation industry descends on Farnborough show

18th July 2010, Comments 0 comments

The aviation sector descends on the Farnborough International Airshow near London this week amid fresh setbacks and increased competition for top planemakers Boeing and Airbus.

Any new orders for aircraft at one of aerospace's biggest events are likely to be dominated by airlines from emerging economies across Asia and the Middle East where air traffic is growing rapidly, according to analysts.

"In Asia and China in particular, there are massive orders coming through. Similarly in the Middle East. There is enormous growth coming through that part of the world as well," said independent aviation analyst John Strickland.

"The economic climate has certainly slowed orders for established traditional markets such as Europe and the US," he told AFP.

The biennial Farnborough show also traditionally sees the announcement of orders for military jets but with governments set to slash their defence budgets to help reduce huge public deficits, major deals may be scarce.

US planemaker Boeing and its European rival Airbus meanwhile head to the show facing increased competition for their mid-sized civilian jets from smaller manufacturers, such as Brazil's Embraer and Bombardier of Canada.

"Commercially, we've still got the big players Boeing and Airbus slugging it out," said Strickland.

"We've also got emerging producers of small aircraft such as Bombardier, Embraer, and indeed new players coming up in Russia and China which are producing aircraft which in future decades can become bigger challengers to the established order of Boeing and Airbus."

Ahead of Monday's start to the show, Boeing said it may be forced to delay to 2011 the delivery of its first 787 Dreamliner aircraft scheduled at the end of this year.

The fuel-efficient mid-sized aircraft designed to fly long distances, and which has been beset by delays, will be on display at Farnborough alongside Airbus' long-delayed A400M military transport plane.

Airbus recently suffered a blow of its own when the World Trade Organization ruled that multi-billion-dollar subsidies it received from the EU were illegal. Whether Airbus will have to repay any money is not yet clear. Meanwhile the WTO is soon expected to deliver a ruling on the legality of US subsidies to Boeing.

Howard Wheeldon, senior strategist at BGC Brokers, said he did not expect "many, if any really significant orders" for either Boeing or Airbus at the airshow.

"Financing remains a big issue for airlines and my guess is that this is a situation that will get worse," he said.

But in June, Emirates boosted its reputation as the world's most bullish airline with an order for 32 "superjumbos," the biggest contract in civil aviation history according to a delighted Airbus.

The 11.5-billion-dollar deal, unveiled just as the global airline sector emerges bruised and battered from the worst global slowdown in decades, will take the number of A380s ordered by debt-ridden Dubai's flag carrier to 90.

"We'll probably expect to hear the announcement of one or two more aircraft orders from Emirates" in Farnborough, said analyst Strickland.

© 2010 AFP

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