The Paris Air Show is normally all about jetliner deals as Airbus SE and Boeing Co. compete to parade contracts worth tens of billions of dollars that can account for a big chunk of the annual order book.
This year’s trade fair, which begins on Monday in the French capital, will be very different.
For Boeing, plunged into crisis by the grounding of the 737 workhorse that’s been the bedrock of sales for decades, the show will be an exercise in damage control. Unable to say when the new Max version of the jet will fly again after two fatal crashes in five months, the U.S. firm must convince customers and suppliers alike that it has a strategy in hand to cope with all eventualities.
Airbus is expected to exploit the paralysis at its rival by unveiling an ultra-long-range addition to its A320-family of planes, seeking to press home an edge in narrow-body sales that was becoming apparent even before the Max was idled. Boeing, buffeted by uncertainty over the 737, has already been forced to shelve a launch of a new mid-sized plane that just a few months ago had been expected to dominate the biennial Paris expo.
“This air show is different, it has a different tone to it,” Boeing Chief Executive Officer Dennis Muilenburg said Sunday in a pre-show briefing. “We come to this air show with a tone of humility and learning.”
Overall jet sales are expected to be down from last year’s alternating Farnborough show in the U.K. Order backlogs already stand at all-time highs after a succession of model launches over the past decade allowed airlines to satisfy their most pressing fleet requirements.
Aviation consultancy IBA Group predicts that firm and outline orders will total 575 planes, with 435 of those going to Airbus. That compares with close to 1,000 at Farnborough, where Boeing won commitments for 528 jetliners valued at $79 billion, compared with 431 worth $62 billion at its arch-rival.
That’s not to say that orders won’t still be to the fore. Airbus will want to underpin the new A321 XLR with significant contracts, especially from airlines in Chicago-based Boeing’s own backyard, which have been evaluating the model for trans-continental operations. The European planemaker could also announce deals for the A220 model that it acquired last year from Bombardier Inc. and is marketing as an entry-level narrow-body to complement the A320.
For Boeing, an order for the Max, especially from a major customer, would come as a godsend. Such a deal would allow the stricken group to argue that it retains the confidence of the industry even as it grapples with a fix for software and sensor glitches blamed for the crashes, and faces wider questions about whether it put the need to compete with Airbus ahead of safety concerns.
Boeing can also realistically hope to top Airbus in sales of wide-body jets, a market where it continues to enjoy a market-share advantage.
Muilenburg said in the eve-of-show briefing in the French capital that he still has confidence in the marketplace, albeit “a humbled confidence.” He said the emphasis, though, is on what he called Boeing’s core values of safety, quality and integrity, adding: “It’s important to us to talk to our customers, all of the suppliers, all of the aviation industry.”
Boeing is conducting a review of its safety procedures and internal processes, while regulators are studying an array of factors, including “every element” of the training syllabus, the CEO said.
Muilenburg said a planned $15 billion investment in a jet Boeing calls the new midmarket airplane, or NMA, is secondary to getting the Max flying, though work on the model will continue and it should still be possible to bring it to market by 2025. Designed to fill a segment Boeing once controlled with the 757 and 767, the jet would have a 5,000 nautical-mile range and seat 270 people.
Airbus sales chief Christian Scherer gave the strongest indication yet on Friday that the Toulouse, France-based company will use its home expo to launch the XLR. The existing A321LR can fly 4,000 nautical miles and “hint, hint, hint, will have a longer range in the near future,” he told reporters. The new jet is expected to have a redesigned fuel tank and fly about 20% further. Muilenburg said that would do no more than “scratch the edge” of the potential market for the NMA.
Scherer also talked up possible announcements concerning the A330neo wide-body, a re-engined version of an older model that Boeing had also planned to squeeze with the NMA.
IBA says that in addition to satiated fleet requirements, demand is being suppressed by the return of aircraft to the market from airlines that have failed due to falling fares and slowing traffic, as well as higher fuel and foreign exchange hits and the impact of the China-U.S. trade dispute.
Jefferies forecasts that orders across the industry will total about 1,000 planes for the whole of 2019, down from 2,021 last year and 1,640 in 2017. Boeing and Airbus backlogs equate to seven years of production and more than 90% of delivery slots for 2020 to 2022 have been filled, confining new purchases to top-up deals and jets with better availability, it said.
Away from the Max and XLR, fallout from the breakup of Bombardier’s aviation business may make headlines.
The Canadian manufacturer is seeking a buyer for a state-of-the-art wing plant in Belfast, Northern Ireland, and is also in talks to sell its CRJ regional-jet program to Mitsubishi Heavy Industries Ltd. The Japanese company is set to launch a smaller version of its own MRJ in Paris targeted at the U.S. market as it moves to fill the gap left by the crumbling of Bombardier’s longstanding regional-jet duopoly with Embraer SA of Brazil.