Podcast: Talking Points From A Subdued Farnborough Airshow

Listen in as Aviation Week Network's team on location at the Farnborough Airshow discusses key themes from the international event, which has seen a more muted presence from both Boeing and Airbus this year.

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Rush Transcript

David Casey:                 Hello, everyone, and thank you for joining us for Window Seat, our Aviation Week Air Transport podcast. I'm David Casey, editor in chief of Routes. Welcome aboard. This week, we're recording live from the Farnborough Airshow taking place in the UK, and I'm delighted to be joined by my colleagues, Victoria Moores, European bureau chief at Air Transport World, and Alan Dron, Europe and Middle East correspondent at Air Transport World. It's great to be with you. As I'm sure many of our listeners will know, Farnborough is held on a biannual basis and alternates with the Paris Air Show each year. Not only does it serve as a trade show attracting some 80,000 visitors, it's also a major networking event, a venue for new product announcements, and a setting for deal making.

                                   We've entered the show with burgeoning demand for air travel worldwide, but also much uncertainty and concern. Now, before the show started, we knew that Boeing's presence would be more muted than usual, owing to challenges faced since the Alaska Air 737 MAX-9 incident in January. It's therefore adapted its presence to, in its words, “prioritize factory safety and quality.” Alan, you were at a briefing on the eve of the show with Boeing Commercial Airlines CEO Stephanie Pope. What was said there? And how has Boeing's presence at the show been this year?

Alan Dron:                    Well, David, as you say, Boeing had rather telegraphed that they would be having a quiet show, bringing no aircraft here for the first time in living memory, and that they would instead focus, as you say, on its efforts to restore quality and confidence in the company. The briefing was pretty much standard. Nothing terribly enthralling came out of it, just this renewed focus—well not a “renewed” focus, but very much a strong focus on trying to get back to where the company feels it should be as one of the world's two leading global aircraft manufacturers.

David Casey:                 Airbus coming into it then, you'd expect them to take advantage [as] its competitor struggled. Has it played out like that, Victoria? What has been your assessment of Airbus's presence here in Farnborough?

Victoria Moores:           Yeah, thanks, David. Shortly after the briefing that Alan attended, I was at an Airbus briefing—again just before the Farnborough Airshow actually began. As you would expect, the journalists in the room asked Airbus about what their view was on the struggles that Boeing has been going through. To my mind, the response from Airbus was very humble and not taking advantage of the situation at all. So we heard from Airbus Commercial Aircraft CEO Christian Scherer. What he said was, "What happens at Boeing is at best a healthy reminder to us of the things that you don't take your eyes off. It's not good news for our industry as a whole when one of the players loses its way." And then he went on from that to talk about how Airbus is focusing on its own business, which is also challenged by supply chain issues at the moment, as characterized by their recent acquisition of some of Spirit’s [AeroSystems] activities for their aerostructures.

David Casey:                 So we've heard the viewpoint of both Boeing and Airbus going into the show, but what has it been actually like here in Farnborough? Have orders been more muted and been more subdued than perhaps expected, would you say?

Victoria Moores:           David, I think what was noticeable was we were told going into the show that Boeing's presence was going to be more muted. But in actual fact, it surprised me that we didn't hear anything from Airbus on the first day of the show. So we didn't have any big order announcements. There [were] no Airbus press briefings. And considering that it was Boeing that we were expecting to be fairly quiet, it surprised me that it was actually Airbus that was quite quiet on day one. But I know that you were covering the Boeing announcements. What was your experience at those?

David Casey:                 Well, I think it's probably unsurprising that we haven't had too many narrowbody orders, because there are few slots available, and that was evident on the first day. But we did see some widebody orders, and particularly from Boeing. One of the big ones was Korean Air. So Korean ordered two 777Xs and 20 787-10s with options for 10 more, which I think was probably the standout order on the first day. Now, Korean Air's CEO [Walter Cho] said he was confident that Boeing would honor those delivery commitments. And he said he wouldn't have actually placed the order had he not had the assurances that Boeing would follow through. So I think that was quite an interesting thing. That was reiterated at some of the other orders that we heard on the first day. And Alan, more generally, what do you think the mood of the show is this year?

Alan Dron:                    The show to me has a curiously quiet feel. The halls are crowded certainly, but the show somehow lacks its usual feel of urgency. It doesn't help, I think, that the static park is distinctly scrappy, and there's not a lot of interest there to excite interest. One possible measure of this is that scribes such as ourselves can normally be found moving between Boeing and Airbus press conferences and back again and back again at a very high rate of knots, rather like one of His Majesty's frigates. This year, the pace has been rather more akin to that of a Mississippi paddle steamer.

David Casey:                 You have got a good point there, Alan. I didn't think we were going to be talking about paddle steamers on the podcast, but my step count for this year's, shall we say, is certainly down on previous years. Now, Victoria, what is the mood of the show for you? Do you agree with Alan?

Victoria Moores:           Yeah, I definitely think that it's been a lot more subdued than a lot of the previous Farnboroughs and Parises that we've attended in the past. One thing I have noticed is that a couple of the orders that we've had over the first two days of the show were reiterations of agreements that we were already aware of. So for the stuff that I covered, Japan Airlines seemingly announced some quite significant aircraft orders. So we've seen them here at the show firm up 10 787-9s and also 11 A321neos and 20 A350s. So it seems like that would've been quite a big order there from JAL, but we were already aware of that because they announced the memorandums of  understanding for that deal back in March.

                                   One thing that I found quite an interesting nugget of information from that is that originally, the memorandum of understanding was for 21 A350s, and we noticed at the press briefing today that the finalization of the order was just 20. That's because JAL had already firmed up one of their A350s to replace the aircraft that was destroyed during an accident back in January.

David Casey:                 Yeah, I think that is an interesting point about re-announcements. We heard on day two from Qatar Airways placing an order for 20 more 777-9s. Now, they hadn't actually formally announced that, but the order was placed earlier this year, and it was just listed as unidentified on Boeing's orders and deliveries website.

Victoria Moores:           Yeah, you mentioned that trend there, David, about the re-announcement of orders which have potentially already been finalized outside of the show. I'd say the other trend that we're seeing continuing at the air shows is that historically, the media always used to ask about list prices. List prices would always be in the front line of the manufacturer's press releases about their orders. And that has really pretty much disappeared altogether. That was really cemented for me today at a Virgin Atlantic order announcement for another seven A330neos, where Airbus Commercial's CEO Christian Scherer was asked about list prices specifically—twice. And he responded saying, "We don't talk about list prices. It's always a bespoke deal for each airline." So that for me is a consolidating trend at the air shows.

David Casey:                 Yeah, absolutely, Victoria. I think it's exactly the same for Airbus and Boeing, that we're not seeing those list prices now. In the case of Airbus, Alan, they came to Farnborough this year on the back of the news that the A321XLR has just been certified. We're expecting deliveries later this year and we're expecting Iberia, the launch customer, to launch its first route in November, which will connect Madrid and Boston. Now, we haven't seen the XLR in the static display, but it has been in the flying display. You were at a briefing with Boeing where they talked about their competitive response to the XLR. What was said there?

Alan Dron:                    Boeing, as you might imagine, if not exactly dismissive of the aircraft, then it's certainly trying to minimize its impact. Boeing believes that the longer the flight time, the more that passengers will want a different product than a standard narrowbody. They felt that the XLR would only really have an effect at fringes of the market.

Victoria Moores:           That's really interesting, Alan, because when I was at the Airbus briefing, one of the things that they opened with was the fact that they believed that the XLR is going to fill in that missing link, which is the middle of the market aircraft, which was formally addressed by the [Boeing] 757. And there hasn't really been a replacement for that. Again, we heard that reiterated by Japan Airlines who, when they were announcing their confirmation of their Airbus order, they said that they were bringing in A321neos—not the XLR, but A321neos—to replace their [Boeing] 767s. So it looks as though Airbus is getting into that market segment. Interestingly, JAL say they're waiting for entry into service and they're watching the program with great interest.

David Casey:                 Meanwhile, in the Far East, we've obviously got Chinese manufacturer COMAC, which is becoming a competitive threat. What has Airbus had to say about that, Victoria?

Victoria Moores:           Christian Scherer from Airbus—and again he's their Commercial Aircraft CEO—at their media briefing said that they do view COMAC as a serious competitor. They were very emphatic about that. They don't want to discount COMAC as being a potential rival, but what they did say is that what COMAC has come to the market with, with their C919, is effectively an A320neo of sorts. While COMAC has got good penetration in China, it doesn't really have much more of an international presence. And what Christian Scherer was saying was that when Airbus came into the market, obviously it was a newcomer up against Boeing. But Airbus had to come in with technologies which were disruptive for the market. And he said, "Really, reproducing a product that's already there with existing technologies doesn't really move the needle forwards far enough," but they're definitely not dismissing COMAC as a competitive threat. I'm wondering, Alan, did you hear anything from Boeing on COMAC?

Alan Dron:                    Not specifically this year, but I can't help remembering that at the Paris Air Show last year, Boeing Commercial Airplanes then CEO, Stan Deal, was quite firm in his belief that COMAC would not be a major rival for at least 10 and even perhaps 20 years. Interestingly, we know that COMAC have tried to get international certification for their latest aircraft. They didn't bother with the ARJ20 regional jet, but they are going forward with the C919. And they're in the latest stages, we believe, of obtaining certification from the European Safety Agency, EASA, which will certainly give that aircraft a greater stamp of credibility in the international marketplace.

David Casey:                 Aside from Boeing, Airbus, and COMAC, Alan, you were at a briefing with Embraer today. What was said there?

Alan Dron:                    Again, relatively low-key, no real orders. The main technical area of interest was a new automated takeoff system for its E195 regional jets or E190 and E195 regional jets that will enhance payload range performance, together with a fairly significant internal refurbishment of the E175-E1 version, which is a major player in the US regional market, but otherwise nothing of riveting interest.

Victoria Moores:           Following on from that, Alan, during the show, we've heard from De Havilland Canada, which acquired the rights to the Dash 8 platform from Bombardier, that they're going out and speaking to the operators of the Dash 8 program, seeing what they'd be interested in terms of what they called a “roadmap for the future” of the Dash 8. But one of the things that I noticed from what they said was they wanted to know where a new Dash 8 might fit in. So I'm wondering whether there's a potential there for a new member of the Dash 8 family. Another development that we've heard about at the show in the regional sector is that ZeroAvia is developing hydrogen-electric powertrains for the regional sector. And they gave an update on whereabouts they're up to on their programs. They were talking about powering large turboprops and also about the potential for them to power narrowbodies as well.

                                   Where they're up to at the moment is they have an engine which is called the ZA600. Now that's quite small scale. It's a prototype engine, which has flown on a Dornier 228. That's going to carry passengers up to about 20 seats. So it's still fairly small scale for now, but they've already put in their design for certification for the US FAA and also the UK CAA. Beyond that, they're working on another powertrain, which is going to be the ZA2000, which is going to power turboprops from 40 to 90 seats. They're eyeing up entry to service for that around about 2028, [with] engine certification in 2027. So we're really seeing that potentially entering into maybe the radar of commercial airlines looking for what they're going to do for the future with that run-up to net-zero drawing in closer now.

David Casey:                 And sustainability, of course, has been a really key theme at previous air shows. I take it, it has been the same at Farnborough this year.

Victoria Moores:           Yeah, absolutely. Sustainability has been front and center. Now, in actual fact, the majority of several of the days that we've been covering the show has been taken up with sustainability briefings. A couple of the ones that I went to, we had airlines like British Airways and also airline bodies like IATA talking about how essential it's going to be for airlines to act on carbon removals. So they were predicting that we're not going to make it to net-zero without those carbon removals from the atmosphere, either through natural sources or through engineered responses. So it was surprising for me to hear that for the first time, that we really need to do that. Otherwise, it's going to become very expensive, and we might not have the facilities there in future for airlines to remove that excess that they're not able to reduce by technology or other means.

                                   A couple of other things that have come up during the show have been new partnerships in terms of sustainability. So we've heard from Boeing, which is partnering up with a finance provider to support a sewage-based sustainable aviation fuel (SAF) project. Also, IAG, I think in particular who won the ATW Sustainability Award this year, they've had a very strong vocal presence here at the show. So I think that the topic of sustainability is definitely not going away from air shows, and it's going to continue to dominate for the years to come.

David Casey:                 Thanks, Victoria. And on that note, we are all out of time for this week's episode of Window Seat. So Victoria and Alan, thank you so much for joining me today and for your insights. It's been great working with you here at Farnborough, as ever. Thanks to our producers, Cory Hitt and Guy Ferneyhough, and of course a very big thanks to you, our listeners. As always, please make sure you don't miss our weekly recordings by signing up via Apple Podcasts or wherever you listen. So until next time, this is David Casey disembarking from Window Seat.