by Ray Jaworowski, Senior Aerospace Analyst, Forecast International.
The 2017 International Paris Air Show produced a fairly impressive number of sales announcements, though the pace was down a bit from recent Paris shows. Orders and other commitments for commercial airliners (including regional jets and turboprops) announced at the show totaled just over 1,000 aircraft. In terms of sales, this put the 2017 show somewhat behind the 2015 Paris show and well behind the 2013 Paris show, but ahead of the 2016 Farnborough show.
Nevertheless, Airbus and Boeing both had good shows. Airbus garnered orders and commitments for 326 aircraft, while Boeing announced orders and commitments for 571. The Boeing total does not include more than 200 conversions of previous orders to new models, mostly involving customers switching to the newly launched 737 MAX 10 from the 737 MAX 8.
Overall, the 2017 show displayed an aviation industry that, bolstered by consistently strong air traffic, is more than willing to continue purchasing aircraft despite economic uncertainty. Customers from Asia were especially active – one more sign of an accelerating shift in demand in the large commercial airliner market to Asia. Over the next 10 years, Forecast International’s projections indicate that customers in Asia will account for 27 percent of the large commercial jetliner market, outpacing North America (22 percent), Europe (20 percent), and the Middle East (18 percent). Air travel demand in Asia is rapidly increasing due to a strong regional economy and a growing middle class. Increasing liberalization of the region’s air transport market also contributes to the robust demand.
Still, a couple of concerns do emerge as one digs deeper into the order/commitment totals from the Paris show. First, leasing companies accounted for around half of the announced commitments. While not necessarily problematic, orders from lessors often are at least partly speculative in nature, based on the expectation of placing the aircraft with airlines. In addition, a strong level of demand from lessors raises the possibility of a redundancy with orders from airlines, as airlines and lessors look at the same set of traffic statistics before deciding to place an aircraft order.
Second, sales of widebody airliners were sparse. Widebodies accounted for only 76 of the combined Airbus/Boeing orders and commitments announced at the show. The market for widebody airliners is suffering from excess global capacity and a surplus of used widebodies on the secondary market.
These concerns aside, though, this year’s air show at Paris showed an industry that is facing the future with some confidence and more than a little momentum.
Please feel free to use this content with Forecast International and analyst attributions, along with a link to the article. Contact Ray Peterson at +1 (203) 426-0800 or via email at ray.peterson@forecast1.com for additional analysis.
The Forecast International Civil Aircraft service covers all facets of the fixed-wing commercial and private aviation industry. It includes more than 70 detailed reports, complete with production forecasts on individual civil aircraft families. Four Market Segment Analyses provide in-depth examination of the markets for Large Commercial Jet Transports, Regional Aircraft, Business Jets, and General Aviation/Utility Aircraft. Included in the reports are production forecasts, a Forecast Rationale detailing the basis for the forecast, the aircraft’s price range and technical specifications, a program history, and recent developments.
A military history enthusiast, Richard began at Forecast International as editor of the World Weapons Weekly newsletter. As the Internet grew in importance as a research tool, he helped design the company's Forecast Intelligence Center and currently coordinates the EMarket Alert newsletters for clients. Richard also manages social media efforts, including two new blogs: Defense & Security Monitor, covering defense systems and international issues, and Flight Plan, which focuses on commercial aviation and space systems. For over 30 years, Richard has authored the Defense & Aerospace Companies, Volume I (North America) and Volume II (International) services. The two books provide detailed data on major aerospace and defense contractors. He also edits the International Contractors service, a database that tracks all the contractors involved in the programs covered in the FI library. More recently he was appointed Manager, Information Services Group (ISG), a new unit that encompasses developing outbound content for both Forecast International and Military Periscope.
