Sun Sentinel Palm Beach Edition
737 grounding hangs over Paris Air Show
Uncertainty over a Boeing jet and apprehension about the global economy hover over the aircraft industry as it prepares for next week’s Paris Air Show.
That show and its alternatingyears companion, the Farnborough International Airshow near London, are usually upbeat celebrations of the latest and greatest in aviation technology. In recent boom years, they have become a stage for huge aircraft orders.
This year, however, the mood could be different.
The Boeing 737 Max has been grounded worldwide for three months after new flight software played a role in two deadly plane crashes. There is no clear date for when it might fly again.
There are other troubling signs for the industry. After several years of surging growth, passenger traffic in March grew at the weakest rate in nine years, although April was slightly better. The chief of the International Air Transport Association, a global trade group, blamed a slowing global economy and damage from tariffs and trade fights.
Air cargo shipments — considered a leading economic indicator — fell 4.7% in April, continuing a slump that began in January and could dent demand for air freighters.
And airlines have committed to buy so many planes that Boeing now has a backlog of 5,500 orders and Airbus has 7,200 — far higher than usual. Airlines might not have much appetite for more.
“There is a lot to be concerned about,” said Richard Aboulafia, an aerospace analyst with Teal Group. “It might make for kind of a grim Paris.”
Heading into the show, Boeing and Airbus have reported much weaker orders this year. Boeing received no orders in May after getting just one in April. Deliveries of completed jets tumbled 56% last month as it stopped shipping new Max jets. Airbus saw an increase in deliveries, but it reported just one new order last month.
Airlines have placed so many orders for the Boeing 737 and Airbus A320 family already that analysts expect few new sales for those so-called narrow-body planes during the air show.
Credit Suisse analysts predicted that no airline will order any more Max jets until the grounding is lifted.
“I do believe that that aircraft will get back in the air and commercially minded airlines will buy it, but just not next week,” said Samuel Engel, a senior executive at the airline and aircraftfinance consultant ICF.