Global slowdown fears overshadow S’pore aviation show
SINGAPORE: Aerospace leaders gatheringforthisweek’sSingapore Airshowfaceconflictingpressures as they juggle growing concerns over jetliner demand while keeping record production plans on track.
Worries about the effects of a faltering global economy and tensions in the South China Sea overshadow the two-yearly event in Singapore, which is both a major commercial travel hub and home to Southeast Asia’s most potent and best-trained air force.
For now, airline traffic continues to grow rapidly, spurred by continued growth in Asian household incomes, while airline profits also benefit from low oil prices.
Butasaerospaceindustryshares fall in step with tumbling global markets, analysts increasingly question the durability of an aerospace expansion cycle now in an unprecedented eighth year.
After a lackluster show in Dubai in November, the industry’s expo bandwagon rolls into the crucial SoutheastAsianregionwithoutthe carnival atmosphere of previous years.
“All the thoughts that this is no
All the thoughts that this is no longer a cyclical industry have disappeared. We are due for a down-cycle. (But) I don’t think there will be any impact in the next 18 to 24 months. It is when you get beyond 24 months that you might see some softening.
Jerrold Lundquist, aerospace consultant and managing director of The Lundquist Group
longer a cyclical industry have disappeared.Wearedueforadowncycle,” said aerospace consultant Jerrold Lundquist, managing director of The Lundquist Group.
“(But) I don’t think there will be any impact in the next 18 to 24 months. It is when you get beyond 24 months that you might see some softening.”
Southeast Asia is one of the industry’s major drivers and has placed record orders in recent years, leading to speculation of overcapacity. Some carriers, including Philippine Airlines, are expected to acquire new aircraft this week.
But rather than counting up new orders, analysts say investors’ main concern this week will be to check for signs of waning travel or jetliner demand and whether an overloaded supply chain is in danger of breaking as manufacturers work to turn a record backlog of orders into a smooth flow of deliveries.
“We will be keeping a close eye on traffic this year to see if we can detect emerging signs of weakness,” said Rob Morris, head of consultancy at UK-based Flightglobal Ascend.
Doubtsovereconomicconditions have not stopped Airbus and Boeing pursuing a battle of wits over new designs.
Airbus, anxious to close the gap between its new 369-seat A350-1000 and the 406-seat Boeing 777X, is seeking an influential champion such as Singapore Airlines for a potential bigger version of its A350 series, industry sources said. — Reuters