Written by Roberto Leiro, with contributions by James Field
FARNBOROUGH — The slight recovery of the air cargo market, the aviation leasing business, and the ever-growing demand of India and the Asia-Pacific region have been the main factors that have stimulated the order books during the first day at the Farnborough Airshow.
The Future After BREXIT
The Prime Minister of the United Kingdom, Theresa May, officially opened the Airshow, in a time in which the country readies its exit of the European Union, set to take place during the first quarter of 2019.
The so-called Brexit has brought economic turbulence to the United Kingdom.
Airbus, one of Britain’s biggest manufacturers, has recently admitted that a bad UE deal may cause the relocation of thousands of jobs out of the country.
The warning caused the protest from Brexiters, who accused Airbus of not acting in the best interests of the UK.
Despite the accusations, May offered more than $397m of government and industry money for several projects, including the research on environmentally friendly aircraft.
“This is an incredibly exciting time for aerospace. Not only is there huge growth potential, but many of the developments taking place have the potential to transform the way we fly,” May said.
The Global Cargo Market Recovers
The rain of orders began moments before the opening of the show, with an announcement from the express logistics giant, DHL, for 14 Boeing 777 freighters, including purchasing rights for seven additional aircraft of the type.
The good fortune for the 777F order books continued with a deal from Qatar Airways, which finalized an order for five freighters, previously announced as a commitment in April.
The order is an addition to another two of the type, intended to replace its Airbus A330F fleet during the first quarter of the next year.
The cargo demand has continued to trend upwards, and the freight volumes have picked up in the past few months.
According to IATA, the global airfreight demand is gaining momentum, and it is expected to grow to $4.48 trillion by 2021, equivalent to a growth of 19.2% per year.
The NEO and the MAX Dominate The Orderbooks
The Airbus A320neo and the Boeing 737 MAX orders rush came as no surprise. India’s
Jet Airways took the lead with a firm order for 75 737 MAX 8s, previously posted as unidentified.
On the other hand, Vistara Airlines, another Indian carrier, signed a letter of intent for 13 Airbus A320neos, and commitments to 37 aircraft of the type from lessors.
These orders will enable these Indian carriers to fuel their expansion plans in one of the fastest-growing aviation markets in the world.
According to an analysis from Avolon, operators in India will require about 1,100 aircraft to meet the demand over the next decade.
These orders were further topped with an order for 20 A320neos from Macquarie AirFinance, and 30 Boeing 737 MAX from US-based Jackson Square Aviation.
The narrowbody order book for the first day at Farnborough closes with 25 A320neos from Kuwait’s Wataniya Airways, further complemented by an order for six A320neos placed by Oman’s SalamAir, and five 737 MAX 8 from Romanian carrier TAROM.
The largest deal announced today was a Memorandum of Understanding for 80 A320neos from an undisclosed lessor.
At the end of the show, Boeing announced that GOL Airlines exercised conversion orders for 30 737 MAX 8, upgrading the order to the larger MAX 10 variant.
The Brazilian carrier also placed a new order for 15 additional MAX 8s.
The Airbus A350 Comes Back…
The Airbus A350 continues gaining momentum at the Farnborough Airshow after an order drought that lasted almost one year, just broken a few weeks ago with an order for 25 aircraft from Turkish Airlines.
In the show, Airbus scored 10 of the type from China’s Sichuan Airlines, followed by an order from Taiwan’s startup Starlux with 17 A350s.
On the other hand, the Boeing 787 Dreamliner just logged a single order for four 787-9s from Chicago-based United Airlines, which also placed an order for 25 Embraer E175s during the event.
The first day of the show ends with over 300 orders for commercial aircraft, and with a joint backlog standing at 14,327 – the largest ever.
“We’ve seen an incredibly strong start to the Airshow, and this year hosts its most international attendance ever with nearly 100 counties represented,” said Gareth Rogers, Chief Executive of Farnborough International.
The A320neo family and 737MAX variants have all scored some big orders today, which highlights their popularity even further.
The numbers in backlog also substantiate such evidence.
It is also good to see the cargo market growing and that the industry is recognizing that through the additional cargo aircraft ordered today.
Finally, the A350 is picking up some key orders but more units will need to be sold in order to keep the momentum going.
But overall, for the first day of the airshow already generating $46.2 billion, it shows that before the end of the trade days, it will not be hard to make it all the way to $100 billion and start hitting some records.
Don’t miss our live coverage tomorrow with news, analysis and more.