Sustainability the Main Storyline, but Commercial Jet Orders will Dominate the Headlines

For everything that has changed in the aerospace and defence industry in the four years since the last edition of the Paris Air Show, there is one thing that binds it to the past. Boeing and Airbus remain locked in an intense perception battle, eager as always to earn bragging rights over the other in terms of sales. Over the next few days, expect a flurry of orders, subtle one upmanship, and talk about supply chain issues and future aircraft variants.

The two industry giants will, as usual, generate plenty of headlines, but the real story of the ongoing show lies elsewhere – in the number of sustainability initiatives that you will hear about. With the industry intent on making greener air travel a reality, expect sustainable aviation fuel (SAF), electric and hybrid electric vehicles, and hydrogen powered aviation to be major talking points. Keep an eye out for advanced air mobility vehicles as well – they have long ceased to be mere concepts and could be flying over you, if you live in a city – by the end of 2024.

Almost every company of note that is working in the eVTOL (Electric Vertical Take-Off and Landing) vehicle sector is here, eager to make an early impact in a market that is forecast to grow exponentially over the next couple of decades. Some of them have their aircraft on display. Volocopter, which is not hiding its goal of its “air taxi taking to the skies first, commercially, before any other UAM competitor,” is in fact demonstrating eVTOL flights at the show using its Volocity VC200.

The eVTOL segment may well end up being the most eye-catching element of the ongoing show, but that is only a small element of the industry’s larger focus on sustainability. According to a McKinsey report released during the Farnborough Air Show last year, one of the primary reasons for the decline in funding for advanced air mobility (AAM) in the first half of 2022 compared to the same period in 2021, was the industry’s focus on sustainable aviation. While sustainable aviation accounted for just 2 per cent of funding in the first half of 2021, the figure jumped to 23 per cent in the first half of 2022. The current week will tell us if the trend continues.

The Contest to Watch

Excitement over reports that Airbus is preparing to launch a larger version of the 110-130-seat A220 at the ongoing show has died down after a company spokesperson told Reuters that there are no plans to “launch a new variant in the current environment.” Such an aircraft is, however, part of the company’s plans, with the spokesperson confirming that it was only a matter of "when and not if" the aircraft is introduced. The A220, acknowledged in industry circles for its quality and range, isn’t yet a profitable program, and having a larger version would not only give the company a worthy challenger for the Boeing 737 MAX 8 but also lower overall production costs per aircraft. On the flip side, a larger A220 variant would unwittingly become a competitor for the 150-seat A320neo.

Boeing is promoting its newest commercial jets 737-Max 10 and 777-9, both of which are making their show debut. The 737 Max-10, which was launched at the 2017 edition of the Paris Air Show, is designed to carry a maximum of 230 passengers. The aircraft has not completed its certification process yet, but the company expects it to compete well against the Airbus A321neo, which has a maximum passenger capacity of 244. According to the company, the 737-10 will provide operators with more capacity, greater fuel efficiency and the best per-seat economics of any single-aisle airplane. The aircraft type has already met with an enthusiastic response from carriers around the world, including Delta Air Lines, Ryanair and Ukrainian SkyUp. Do not be surprised if the company finishes the show with a few more significant orders for the aircraft.

In the 777-9, which can carry 426 passengers up to 7,285 nautical miles, the company has a clear winner in the long-haul market. With demand for international travel rapidly coming back, more than a few carriers will be looking at the aircraft with more than passing interest.

Overall, Airbus remains comfortably placed, with a backlog of 7,202 aircraft compared to Boeing’s 4,567 aircraft, but after its forgettable performance in Farnborough, the company will be keen to walk away from the ongoing show with a slew of orders. Delta Air Lines, which is looking to replace a combined fleet of more than 100 older A330 and 767 jets, is reportedly in talks with the plane manufacturer for a significant wide-body aircraft order that involves both A350 and A330neo twin-aisle jets, but it is not a given that the news will be announced over the course of the week. Success could come Boeing’s way from the Middle East at the current show, with Riyadh Air looking to purchase around 150 737 Max aircraft and Turkish Airlines eyeing a massive order of up to 600 aircraft, including both Boeing and Airbus jets. Indian carriers could end up hogging the headlines as well, with IndiGo have gone public with its plans to order 500 aircraft and Akasa also looking at a triple-digit order.

Springing a Surprise

Farnborough 2022 threw a surprise, with Embraer stealing the limelight with orders for as many as 280 aircraft, 35 more than Boeing and streets ahead of Airbus that ended the show with orders for 29 new aircraft. Both Airbus and Boeing seem to have warmed up nicely for the main event of the year, if sales in May are anything to go by. While the European plane maker delivered 63 aircraft, Boeing handed over more than 50 jets last month, up from 35 in April. The American powerhouse however still trails Airbus, which delivered 244 aircraft in the first five months of the year, compared to its 206.

For Embraer, Paris is a chance to consolidate the gains from Farnborough where it made news by ending the Airbus-Boeing duopoly at major trade shows. The company’s Turboprop Next Generation (TPNG) Program was a big hit at the show, with letters of intent (LoI) for more than 250 aircraft signed with multiple airlines from regions such as Europe, Africa, Latin America, North America and Asia-Pacific. The company plans to come out with two variants of the aircraft - 70 and 90-seat versions, with a 2028 entry-into-service for the first model and 2029 for the second. With the launch of the platform expected this year, one of the headlines generated over the next few days is likely to be an update from the company on the launch date and the variant that will enter the market first. With demand surging post-pandemic for regional travel on short-haul routes, do not be surprised if the company walks away from Paris with more orders in its bag for its proposed aircraft.

While the enthusiastic reception from carriers to the TPNG program is great news for the company, Embraer will be hoping that the industry-acknowledged quality of its E2 program will translate into more sales for the aircraft type. Expect the company to focus its sales pitch on the E2 at the ongoing event, with an eye on securing more orders for the program. Its sustainability-focused Energia aircraft family – the company initially unveiled four concepts over a year ago but has since decided to initially focus on two 19 and 30 seater designs for hybrid-electric and hydrogen-electric propulsion – will also be a talking point at the show.

The total recovery of the industry from the pandemic and the palpable excitement around the show on the part of companies and attendees have led at least one analyst to forecast that the number of orders could end up being the highest ever. If most of the ongoing discussions between plane makers and buyers end up being successful, as many as 2,100 orders could be announced during the week, says Stuart Hatcher, chief economist at IBA. The number could end up being close to 3,000 if all the rumors floating around about potential orders prove to be true, he adds.

There will be plenty of action on the defence side as well, as the ongoing Russian aggression on Ukraine has prompted militaries in the region to increase defence spending and to upgrade their military capabilities. Regional tensions in the Asia Pacific and Middle East are acting as a catalyst for arms sales as well. With global military spending reaching an all-time high last year, expect several high-profile deals to be announced at the show.

Vying for Attention

As many as 154 aircraft, including mock-ups, are on display at the show, with Airbus bringing the largest number of aircraft to the event – 14. The European OEM’s list includes the A321XLR, the A350-900, the A321LR, the A330 MRTT, five helicopters - the H-125 ECUREUIL, the H-225 M Caracal, the H-175, the H-145, and the H-160 – and mock-ups of the EURODRONE, the VSR 700, and the H-125 M. Close on the heels of Airbus in terms of the number of aircraft is the US Department of Defense with 13. Embraer has brought five aircraft - two C 390 Millennium, two E 195-E2s, and one EMB-314E Super Tucano – to the show while ATR, its competitor in the regional jets market, is displaying two ATR 72-600 aircraft.

Qatar Airways, the French Ministère des Armées, Gulfstream, Leonardo, Dassault Aviation, and De Havilland are among the other companies that have jets on display. Unlike previous editions when the aircraft were either commercial, military or business jets, there are eVTOLS on display, including those being developed by Volocopter, VoltAero, Eve Air Mobility, Archer, AutoFlight, EHang, Lilium, Ascendance Flight Technologies and Pterodynamics.