An employee works at the Airbus A350 assembly site, in Colomiers near Toulouse, in southwestern France, on December 9, 2022.
Valentin Chapuis | AFP | Getty Images
A lot has changed in the four years since one of the aviation industry’s biggest air shows was held in person.
The Covid-19 pandemic has devastated travel demand, the aviation industry has lost thousands of experienced workers and the roller coaster appetite for new jets has wreaked havoc on new plane production rates.
After all that, the Paris Air Show – a trade event where companies have the chance to showcase new technologies, commercial and military aircraft and strike deals – returns on Monday amid a surge in demand for air travel, jet-starved airlines to feed it. . The question is whether BoeingAirbus and its many suppliers can catch up.
“It’s putting pressure on order books – it’s creating upward momentum on used aircraft rental rates and forcing airlines to compromise,” said Andy Cronin, CEO of the airline. Avolon aircraft rental.
Aviation analyst firm IBA estimated last week that there could be orders for around 2,100 planes during the show as airlines replace older planes and prepare for future growth in air travel.
During the past year, Boeing has recorded large orders or preliminary customer agreements, including United Airlines, Saudia and the new Saudi carrier Riyadh Air. Air India’s massive order earlier this year included both Boeing and Airbus jets.
The chairman of Turkish Airlines told reporters last month that the carrier plans to order around 600 planes, both widebody and narrowbody planes. The order would be the largest ever for a single airline, although it’s unclear whether it will materialize in time for the show.
IBA Chief Economist Stuart Hatcher wrote in a June 15 forecast that Delta Airlines, Malaysia Airlines and Air France-KLM could be buyers, but the timing is not yet certain. Air Baltic may also consider expanding its fleet of Airbus A220s, he said.
“It may still be too early to call for Chinese expansion, given the political climate, but I wouldn’t be surprised to see additional orders coming in,” Hatcher wrote.
The major challenge for manufacturers now is to increase production. Slots for narrow-body aircraft, such as the Boeing 737s and Airbus A320s, have been sold out for years. Now that long-haul travel is back, some airlines may also be looking to expand their larger, long-haul jet fleets.
But customers around the world have been forced to wait longer than expected for new planes as Boeing, Airbus and a network of suppliers around the world try to ramp up production. This has limited airline capacity, which keeps airfares high.
Qantas CEO Alan Joyce told CNBC last week that he expects supply chain issues to last until 2025.
Boeing and Airbus are working to increase production rates for years to come to meet this demand.
Production delays have also pushed up leasing rates for new and older planes as airlines look for other opportunities to increase flights.
New Boeing 737 Max 8 planes are leased for around $350,000 a month in July, down from $305,000 in January 2020 at the start of the pandemic, IBA estimates. New Airbus 320s cost $355,000, down from $325,000 over this period. Older versions are close to pre-pandemic levels.
“People just want their jets,” said Richard Aboulafia, chief executive of AeroDynamic Advisory.
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