Farnborough Airshow's Hot Topics: NEO vs. MAX, A350 vs. 777
There is little doubt last year's Paris air show was a love-fest for and its . Now has launched the rival 737 MAX, but can the U.S. aircraft maker dominate this year's Farnborough International Airshow to the same extent?
Any attempt to boil down the biennial event—held July 9-15 southwest of London—into a horse race between the Airbus and Boeing single-aisle offering would be to grossly understate the challenges global aerospace and defense representatives will have to address as they gather at the largest industrial meeting of the year. Farnborough 2012 may not mark the first big European air show since Western defense budgets have been in remission, but the uncertainties about lean times that had cast long shadows at earlier shows have become a reality.
Supply chain concerns also will remain paramount. Airbus has already decided to forgo, for now, a ramp-up of output to 44 single-aisle aircraft per month. There are shared concerns across original equipment makers that some suppliers are overstretched in trying to satisfy the increasing demand from Airbus, Boeing and others, including the gradual ramp-up expected to unfold with theJoint Strike Fighter program. What is more, retrenching financial institutions, particularly in Europe, have left some small suppliers underfinanced. For the big aircraft makers, Farnborough will provide an opportunity to look some of their smaller suppliers in the eye and gauge their ability to keep pace.
But many observers believe that the commercial airliner business, which has been on the upswing, will be the focal point of the show. Boeing, for instance, has several big product decisions in the pipeline and the gathering could provide some clarity as to the direction Seattle plans to take. First up is the fate of the next member of the 787 family, the -10X, and what other upgrades will be made to thetoward the end of the decade to keep the product competitive in the face of emerging competition from the Airbus -1000, which is due to be fielded in 2017.
For now, though, Boeing will primarily be focused on getting the 787 into customers' hands. This year, few of those deliveries will be as important as the one to. The airline's outspoken CEO, Akbar Al-Baker, wants his first 787 to be flying at Farnborough ahead of its service entry on the Doha-London route in August. The CEO has roundly criticized Boeing for being run by lawyers (when the 787 was delayed), so the U.S. aircraft maker will be striving to ensure that the twin-widebody is delivered in time to participate.
Nor is Airbus expected to be idle. Having launched itspassenger-to-freighter conversion program at the Singapore air show in February, the European aircraft maker is considering using Farnborough to launch another A330 initiative, a 240-ton maximum-takeoff-weight option. It would be the second such upgrade for the twin-widebody, which has been enjoying a large market share in recent years. The first 235-metric-ton version should enter service this year.
Other enhancements being considered by the European manufacturer include more-capable winglets modeled on the so-called Sharklets now flying on A320s. But there is still uncertainty about whether the fuel burn gains are worth the structural changes that would be needed. Instead, Airbus may improve load alleviation through its fly-by-wire flight controls to gain small fuel burn improvements. Also, it is working with engine suppliers, and Pratt & Whitney to eke out slight specific fuel consumption gains.
In addition, Airbus will have some other challenges on its hands. Last year's announcement at the Paris air show about revising specifications for the A350-1000 was not well received by airlines. Since then, the aircraft maker has seen the backlog for the largest member of the A350 family shrink. Airbus has argued that the airlines are getting a better product, even if at the cost of a two-year delay, but so far, customers are reticent. John Leahy, chief operating officer for customers, insists that will change. At Farnborough, he will have a chance to see whether his efforts at convincing airlines are gaining traction.
Booking further orders for thealso will be on the agenda. Airbus has seen only slow progress in building up its orderbook for its flagship product of late, and with plans to deliver at least 30 aircraft this year it is trying to secure at least that many orders to avoid its backlog shrinking. Eight airlines now operate the A380; , the latest airline to receive its first A380, is due to showcase the aircraft at Farnborough.
Few doubt that the most intense battle will be the A320NEO versus the 737 MAX. Airbus enjoys a huge market share lead over Boeing, which even the European aircraft maker itself does not expect to last at current levels. But Leahy has thrown down a challenge to Boeing, saying the NEO will have a long-term market dominance of 60% in the sector. This year, though, he expects the MAX to garner more deals than the NEO. To some extent, the more important near-term challenge for Leahy is to sell the vacant delivery slots for A320 classics to ensure a smooth product transition to the NEO.
There are still more details to come for the MAX. Boeing's design has evolved in recent months, with the revealing of a new winglet and the gradual increases in fan size. Airbus is touting NEO's much larger fan, but MAX's backers note that the—the only engine offered on MAX 737—may have a smaller but lighter fan to make up for the smaller bypass ratio. The war of words over which aircraft is the more fuel-efficient is already underway. It is possible Boeing will book its 10,000th 737 order at the air show.
In the defense realm, there will be far fewer signs of optimism. The degree of austerity that companies are grappling with is perhaps best illustrated by's decision to forgo Farnborough entirely. In an era of shrinking defense budgets in the U.S. and Europe, attending an expensive event in an increasingly narrow market had to be weighed against focusing on growth areas such as the Middle East and Asia.
As domestic markets diminish for much of the industry in the West and the focus shifts to exports, the battle for foreign deals is becoming more intense.
Indirectly, that sentiment too will be reflected at Farnborough. Even though the U.K. is due take delivery of its first F-35B short-takeoff-and-vertical-landing aircraft next month, do not expect the Joint Strike Fighter to be in the forefront. Interestingly, this is not because of the government's high-profile flip-flop—from the F-35B to the F-35C then back to the F-35B. Instead, U.S. officials indicate that London wants the focus to be on the, even though is a major JSF program partner. Pressure is mounting to secure more foreign sales for Typhoon in light of recent contract award defeats in Switzerland, India and Japan. There seems to be a sense that the Farnborough stage is not big enough for both fighters.
But the Typhoon program recently received some good news. The U.K.'s latest spending plan includes funding upgrades, not yet spelled out, for the multi-role combat aircraft.
Even if the JSF is downplayed, Typhoon will still have to share the fighter limelight at Farnborough.is bringing its demonstrator and, in a game of one-upmanship, the Gripen will be equipped with the Selex Galileo Raven ES05 active, electronically scanned array radar (AESA). Typhoon will not fly with its AESA until next year, nor is government funding expected to underpin the development until that time.
The air show could also provide the stage for the newly elected French government to signal whether it will continue with the Anglo-French defense security cooperation effort. As part of that pact—agreed upon by then-French President Nicolas Sarkozy before he lost the election to Francois Hollande last month—France and the U.K. had begun working cooperatively on a medium-altitude long-endurance unmanned aircraft program, and have paved the way to potentially doing the same for unmanned combat air vehicles. Whether Hollande will follow that path is still uncertain.
The unrelenting focus of European and U.S. companies on exports will underpin the majority of the discussions at Farnborough. With the first customer delivery of theEuropean military transport aircraft in sight around year-end, is ramping up efforts to secure export orders. Boeing, too, is eager for more deals as it labors to keep the strategic airlifter production line open. The appearance of the at the air show also comes as and Boeing look to finalize the first export order for the tiltrotor.