Monday, July 19, 2010
Air Show Kicks off With Small Flurry of Orders
Boeing Co. and European arch rival Airbus racked up billions of dollars worth of aircraft sales at the Farnborough International Airshow on Monday, raising hopes that the aviation industry has touched the bottom of a deep two-year downturn.
But the horizon remains clouded — major European airlines, which are still haunted by recession, mostly kept their hands in their pockets as Middle Eastern carriers and U.S. plane leasing firms made purchases to build up their fleets.
The optimism also isn't extending to the defense side of the sector where massive cuts to Western military budgets were the talk of the industry's premier event.
The biennial gathering at an airfield outside London — bringing together plane makers, airlines, government officials and military top brass — is considered by industry watchers a key test of the industry's health.
More than 1,000 exhibitors from 38 countries have signed up for Farnborough, with delegations from Egypt, Taiwan and Morocco attending for the first time. Organizers also cited stronger interest from major players China and Russia.
"We're gradually starting to see a slow recovery to a new norm," Owen MacFarlane, CEO of CAV Aerospace, told the AP from his exhibition stand at the show.
"So maybe it's not the same volumes as we saw in 2007 and 2008, but certainly an increase from where we have been," he said, noting he cut 25 percent of his work force over the past 18 months. "Everybody seems a lot more buoyant."
Analysts don't expect anything close to the record-breaking $88.7 billion worth of deals announced in Farnborough in 2008, but the gathering has already exceeded the slow orders for commercial planes at Le Bourget last year, where deals came in at around $7 billion.
The International Air Transport Association has forecast that global industry profits will reach $2.5 billion this year, an upturn from the huge $9.4 billion loss in 2009. Asia and North America are expected to lead the recovery, with Europe lagging behind. Strikes at some airlines, the debt crisis and the volcanic ash cloud that caused major disruptions this spring are all hurting Europe's recovery.