MINNEAPOLIS (AP) - A big air show is all
about bragging rights. It's where airplane makers announce large jet
orders, dazzle customers with aerial displays and show off their latest
technology.
But a debt crisis in Europe
could make the industry more subdued when it gathers at the Farnborough
International Air show near London this week. It's a huge event in the
aerospace world, attracting 1,400 exhibitors and aerospace heavyweights
such as Boeing, Airbus, Embraer, Bombardier and ATR.
Air travel tracks economic
growth, and there isn't much of that right now in Europe, one of the
world's largest aircraft markets. Europe's crisis could crimp aircraft
sales for Airbus and Boeing, the world's two largest airplane
manufacturers. Longer term, there is still plenty of demand from growing
airlines in China, India and the rest of the developing world.
Barclays analyst Joseph
Campbell expects total orders to fall this year, but not because of the
economy. He thinks they'll fall because Boeing and Airbus have a
combined backlog of 8,312 planes, and they make roughly 1,000 a year.
Their backlogs are so big,
"and the first available slots so far away, that there's not much left
to sell" other than Boeing's 737 Max, he says.
For Chicago-based Boeing,
this year's show offers a chance for its revamped 737, called the 737
Max, to close a gap with a rival jet. The Max has a more fuel-efficient
engine than its predecessor and will compete with Airbus' A320neo,
another top-selling plane in the same size range that is getting a new
engine. Higher fuel prices mean airlines are willing to pay for more
fuel efficiency.
Airbus got a jump on
Boeing, offering the neo much earlier. It's already got 1,325 orders
from 25 customers. Boeing has orders for 451 Maxes and commitments for
more of the planes, which have a list price between $78 million and $102
million.
"This is a year that they need to play catch-up," says Richard Aboulafia, an aerospace analyst for the Teal Group.
Airbus aims to begin
delivering the A320neo in 2015. Boeing's 737 MAX will go into production
in 2015 and start hauling passengers in 2017.
Boeing heads to the event
with a new chief of commercial aircraft, Ray Conner. Until late June,
Conner ran Boeing's sales efforts, so he'll be right at home in
Farnborough pitching the Max to potential customers.
Toulouse, France-based
Airbus, meanwhile, announced last week that it would build its first
airplane factory in the United States. The plant will produce the A320
in Mobile, Ala., starting in 2015, aiming to better compete against
Boeing.
