Approximately 75,000 professionals and 1,200 exhibitors are anticipated at the airport in southwest London, which hosts one of the major events in the aerospace sector every two years. The ongoing competition for orders between Airbus and Boeing is no longer as intense as it once was, primarily due to significant issues affecting both companies.
Two years ago, in 2022, the previous edition of Farnborough was marked by a tense atmosphere.
The airport in southwest London, generally used for business flights but also hosting one of the sector’s major events every two years alongside Le Bourget, Dubai, and Singapore, took place just months after Russia declared war on Ukraine, violating its borders. Inflation added to the backdrop, but a recovery in air traffic was anticipated following an unprecedented crisis that left a significant portion of the world’s fleet grounded during the pandemic. The climate emergency also emerged as a challenge, emphasizing the need to make sustainable aviation fuel (SAF) competitive with regular Jet A1 fuel—effectively selling it at the same price. This has become a marketing concern for airports as well.
Predictable Unpredictability
Two years later, the number of open conflicts—both cold and hot—has increased. Unpredictability has turned into a predictable reality. Forecasts are often expressed in provisional terms, as volatility demands a management style that can adapt quickly. Every challenge presents an opportunity. The current situation favors increased defense budgets, which also benefits military components, fighter jets, and helicopters. This year, the military and space sectors are expected to take center stage due to the geopolitical climate, noted Jérôme Bouchard, an aeronautics expert at Oliver Wyman.
Order Book of 15,000 Aircraft
The Hampshire show, organized alternating with the Paris exhibition at Le Bourget, will open its doors on July 22 for five days. Approximately 75,000 professionals and over 1,200 exhibitors are expected to attend.
While the fierce competition for orders between Airbus and Boeing remains a highlight of the event, it is no longer as charged as it was in pre-Covid years. The construction duopoly has weakened. Boeing has faced numerous challenges related to production, quality, and safety on three of its best-selling models: the single-aisle B737, the long-haul B787, and the B777. These issues have triggered several investigations by the American aviation regulator (FAA). Airbus might benefit from Boeing’s struggles, but the European manufacturer is also contending with staff shortages that hinder its production capacity.
The fulfillment of commitments to customer airlines is likely to dominate discussions in the halls of the British airport. The combined order book of the two industry leaders stands at an impressive 15,000 aircraft, marking an 18% increase over the past year.
« We aim to deliver safe, high-quality aircraft, predictably and on time. », summarized the challenges to the AFP by Stephanie Pope, head of Boeing Commercial Aircraft. This remark was directed at the US regulatory authority, known for its stringent standards, which has demanded a comprehensive plan from Boeing to restore the high standards expected in passenger transport.
Boeing’s Performance Profile
In the first half of this year, Boeing delivered 76 fewer B737 MAXs than it did during the same period in 2022, totaling 135 units, and there were 9 fewer B787s delivered (22 compared to 31 aircraft last year). However, the option to increase production is not viable until the quality issues are resolved, according to its executives. The FAA has also limited 737 MAX production until that time.
For this edition, Boeing has taken a notably “low profile.” With these priorities in mind, we have reduced our commercial aircraft display booth and flight demonstrations at the show, stated Brendan Nelson, president of Boeing Global (international strategy), in a press release.
The manufacturer is expected to showcase only a few of its latest environmental technology innovations, the F-15 fighter, cargo planes, and a full-scale section of the cabin of its 777X jumbo jet. This twin-engine aircraft is set to replace the iconic B747, which established Boeing’s reputation but whose production ended last year, as well as the A380, a technological marvel that has struggled to find a market.
Recently, the latest addition achieved a significant milestone. The FAA granted a valuable Type Inspection Authorization (TIA) for the 777-9, the initial version to be launched by 2025. The TIA is issued when the review of required technical data concludes that the aircraft will comply with relevant regulations. This represents a critical victory for Boeing, which has encountered certification setbacks with this program since it was introduced in 2013.
This advancement has already sparked market reactions. According to the company’s website, it had secured orders for 534 in the -9 and -10 variants by the end of June.
Challenges Facing Airbus
Airbus, whose reputation largely hinges on its single-aisle A320 family—the group’s cash cow—does not face the quality challenges experienced by its historic competitor but nonetheless confronts a significant issue with production rates and cost management.
While it has been producing just under 44 A320s per month since the year began, it needs to increase that figure to 75 units by 2027 to meet its obligations, although it has already postponed its target by a year. In fact, the company is set to deliver only 770 aircraft this year, down from the initial projection of 800. It has acknowledged this shortfall. Our trajectory is at risk. We are facing significant challenges, admitted Christian Scherer, head of commercial aircraft at Airbus, which has been struggling to gain momentum due to a combination of unfavorable conditions, rising interest rates, component shortages, and recruitment obstacles.
« There are bottlenecks, particularly with cabin equipment, landing gear, and engines, an issue we are monitoring closely. ” Ironically, the manager has informed staff about a cost-cutting initiative and a hiring freeze.
Similar to Boeing, Airbus is making strides in its new programs. Its A321 XLR, a long-range star, has received certification from the European regulator EASA. The aircraft will be on display at the show and is expected to perform flight demonstrations this week.
A Market Poised for Profitability
The show opens as global air traffic is projected to double over the next 20 years, reaching 8.6 billion passengers based on the latest data from the International Air Transport Association (IATA).
In its annual forecasts, released shortly before the event, Airbus estimates that the market will require 42,430 new passenger and freight aircraft with more than 100 seats by 2043, representing a 3.9% increase compared to last year’s projections.
This projection would bring the global fleet to 48,230 aircraft, compared to 24,260 at the end of 2023. Only 5,800 of these aircraft would still be operational in 20 years, necessitating the replacement of 18,460 units (see below).
On the cargo front, Airbus anticipates that the fleet of all-cargo aircraft will increase by half by 2043, reaching 3,360 units compared to 2,220 today, with 2,470 new aircraft scheduled for delivery.
Adeline Descamps
The Center of Gravity of the Aviation Sector is Shifting Towards Asia
According to Airbus projections, of the 42,430 passenger and freight aircraft with more than 100 seats to be delivered between 2024 and 2043, the Asia-Pacific region is expected to receive 19,510 units, including 9,520 destined for China alone. Europe is projected to accommodate 8,050 aircraft, and North America, another mature market, will take 7,100.
China’s domestic air traffic is anticipated to quickly surpass that of the United States in volume, growing at a rate of 5.1% per year between 2027 and 2043, while India’s is expected to increase at a rate of 6.9% per year. The Middle East is another region showing significant growth.
Approximately 80% of the 42,430 new aircraft will be single-aisle planes, such as the Airbus A320neo and B737 MAX, with the remaining 20% being wide-body aircraft like the A350, B787, or 777X.
To base its market analysis for the next 20 years, Airbus is counting on an average global GDP increase of 2.6% and a 3.1% rise in international trade each year, along with an expansion of the middle class by 1.7 billion people, exceeding the net growth of the world population (+1.3 billion).
Farnborough International Airshow 2023: Navigating the Future of Aerospace
Some 75,000 professionals and 1,200 exhibitors are expected at the airport in south-west London, which hosts one of the major events in the aerospace sector every two years. The endless war for orders between Airbus and Boeing is no longer as nervous as it once was, primarily due to crippling problems.
Context of the 2023 Farnborough Airshow
Two years ago, in 2022, the previous edition of Farnborough emerged as the first post-Covid airshow amidst a backdrop of geopolitical turmoil. The ongoing war in Ukraine, birthed from Russia’s aggressive stance, had dramatically changed the landscape. Coupled with skyrocketing inflation, the event witnessed aviation’s resilient recovery, as the industry aimed to rebound after an unprecedented crisis that saw much of the world’s fleet grounded.
Additionally, the growing climate emergency positioned sustainable aviation fuel (SAF) as a critical concern, necessitating competitive pricing against conventional Jet A1 fuel. Airports now face a marketing challenge to promote SAF viability to airlines and customers alike.
Predictable Unpredictability in Aerospace
Since the last airshow, open conflicts have proliferated, making unpredictability the new norm. The volatility in the market means that even forecasts have adopted a tentative tone. Aeronautics expert Jérôme Bouchard from Oliver Wyman suggests that the geopolitical climate has invigorated defense budgets, setting the military and space sectors to take center stage at this year’s event.
Expectations for Farnborough 2023
The Hampshire airshow opens its doors on July 22 for five days, welcoming around 75,000 professionals and over 1,200 exhibitors. While the fierce order battle between Airbus and Boeing remains a highlight, the atmosphere now reflects a different narrative.
The domination of the construction duopoly has faced significant disruption. Boeing is grappling with numerous production, quality, and safety issues across its flagship programs, including the single-aisle B737, long-haul B787, and B777, which have drawn scrutiny from the FAA.
Order Books Amid Challenges
Despite the turbulence, the order book of both companies reflects a demanding landscape, totaling approximately 15,000 aircraft—an 18% increase from last year. Stephanie Pope, head of Boeing Commercial Aircraft, emphasizes the imperative to deliver safe, quality aircraft consistently. This pressure is also a response to FCC’s tough standards demanding a return to high safety benchmarks in passenger transport.
Boeing’s Road Ahead
In the first half of 2023, Boeing delivered substantially fewer units of its B737 MAX compared to the previous year—76 fewer than the same period in 2022—indicating evident production hurdles. Furthermore, the firm reported only 22 B787 deliveries, down from 31.
Boeing is adopting a cautious approach at Farnborough, downscaling its commercial aircraft display to highlight environmental technology innovations and military assets like the F-15 fighter jet and a section of the 777X cabin, intended to replace the retired B747.
Airbus’s Challenges and Opportunities
Conversely, Airbus, famed for its A320 family and seen as a less troubled titan, is still encountering formidable challenges. While not mired in the quality crises haunting Boeing, Airbus is facing production rate problems, reportedly needing to ramp monthly production of A320s from 44 to 75 units by 2027 to satisfy commitments. Yet, projections are already delayed by a year due to persistent component shortages and rising costs.
Key Developments and Innovations
Airbus celebrated the successful certification of the A321 XLR by the European regulator EASA and intends to showcase its capabilities at the show. Additionally, the market appears promising, with estimates suggesting a doubling of global air traffic over the next 20 years, reaching 8.6 billion passengers.
Projected Aircraft Demand
According to Airbus forecasts, the aviation industry will require a total of 42,430 new passenger and freight aircraft with over 100 seats by 2043—an increase of 3.9% from last year’s projections. This evolution is attributed to a forecasted rise in global GDP of 2.6% and a significant expansion of the world’s middle-class population.
| Region | No. of New Aircraft |
|---|---|
| Asia-Pacific | 19,510 |
| Europe | 8,050 |
| North America | 7,100 |
| Others | 7,770 |
A Shift in the Global Aerospace Market
The Farnborough Airshow marks a pivotal point as the center of gravity in the aviation sector continues to shift towards Asia. Predictions indicate China will significantly amplify its domestic air traffic, likely surpassing the United States by 2043. India’s projected air traffic growth also signals a dynamic shift, anticipated to grow at a 6.9% rate yearly.
Future of Cargo Transport
The cargo aircraft market is poised for substantial growth, with Airbus’s forecast projecting a 50% increase in the all-cargo fleet by 2043, potentially reaching 3,360 units. This is a strong indicator that the freight segment will remain a focal point for manufacturers as global trade dynamics evolve.
Final Thoughts
The 2023 Farnborough Airshow stands as a testament to the resilience of the aerospace industry amidst a backdrop of challenges and changing market dynamics. The interplay between Airbus and Boeing, the rise in global air traffic, and the pressing need for sustainable practices will continue to define the sector heading into the future.
These developments illustrate a crucial transformation in aerospace, with increased focus on innovation and adaptation to market demands, setting the stage for the next generation of aviation.
