(Bloomberg) — Aviation executives arrived in Paris for the first air show in the city in four years. The industry\u2019s biggest conclave is expected to yield a bounty of jetliner orders for Boeing Co. and Airbus SE, with India\u2019s IndiGo, Mexico\u2019s Grupo Viva and Saudi carrier Flynas among the airlines looking to bulk up on aircraft.<\/p>\n
The industry is struggling to manage a surge of growth after travelers stormed back to the skies in force after the Covid-19 pandemic. Chief among the challenges are persistent supply chain kinks that have slowed output. That\u2019s left some airline executives wondering when they\u2019ll finally get the jets they\u2019re ordering at the show, while Airbus and Boeing are pushing to raise production as fast they can to help alleviate the bottleneck.<\/p>\n
Saudi Copter Factory (1:40 p.m.)<\/p>\n
Airbus agreed to build military and civilian helicopters in Saudi Arabia with local defense company Scopa Industries Corp. in a deal valued at more than 25 billion riyals ($6.7 billion).<\/p>\n
Construction of the helicopter factory is expected to begin early next year, Scopa CEO Fawaz Alakeel said in an interview from the Paris Air Show. The plant will be able to produce up to 100 military and commercial helicopters a year by the end of the decade, he said.<\/p>\n
Ordering Too Much? (12:45 p.m.)<\/p>\n
Qatar Airways Chief Executive Officer Akbar Al Baker said there\u2019s a risk that airlines are ordering too many aircraft, \u201cat least in our region.\u201d Emirates has said it wants to buy more aircraft, and Turkish Airways is also in the market for additional jets. Riyadh Air has announced orders as it builds a new airline in Saudi Arabia.<\/p>\n
\u201cWe have players flooding the market with huge number of planes, I just hope that they\u2019re doing this right,\u201d Al Baker said.<\/p>\n
The executive said he will place orders again in the \u201cnot too distant future\u201d once the carrier\u2019s fleet replacement plans run out.<\/p>\n
Supply Chain Woes (10:39 a.m.)<\/p>\n
Pratt & Whitney is \u201cmaking solid progress on the supply chain,\u201d and is now returning more GTF engines to service than are being removed, said Shane Eddy, president of the Raytheon unit, in a Paris presentation. The number of GTF-equipped jetliners sidelined for maintenance and repairs \u2014 now about 10% of the commercial fleet \u2014 is stabilizing and should improve by year-end, he said. He blamed customer disruptions on operational issues such as maintenance shops waiting for parts, adding: \u201cThis is not tied to the engine.\u201d<\/p>\n
To improve performance, Pratt is introducing upgrades to the in-service fleet and plans to introduce a GTF variant called GTF Advantage that should be certified by the middle of 2024, Eddy said. \u201cThis drives time on wing that will meet expectations right on entry into service.\u201d<\/p>\n
Going Higher (10:30 a.m.)<\/p>\n
Boeing Co. plans to reach a monthly build rate of 42 aircraft on its bestselling 737 Max model before the end of the year, Stan Deal, the manufacturer\u2019s head of commercial operations, said in an interview with Bloomberg TV at the Paris Air Show. The company is also laying the groundwork for a step-up to a monthly pace of 48 jets over time, he said.<\/p>\n
On the bigger 787 Dreamliner, Deal said the aircraft is the \u201cnext natural act\u201d to be offered as a freighter model.<\/p>\n
Focus on Defense (9:57 a.m.)<\/p>\n
Defense is a major component of the air show, even if commercial deals grab the attention. \u201cThe defense presence is something that we need to showcase here,\u201d US Senator Jerry Moran of Kansas told Bloomberg TV. Russia\u2019s invasion of Ukraine has \u201cgalvanized the world and the transatlantic alliance,\u201d said New Hampshire Senator Jeanne Shaheen in the joint interview. \u201cIt\u2019s also invigorated NATO in ways that we haven\u2019t seen in decades.<\/p>\n
The bipartisan tandem called on President Joe Biden to move quickly to nominate a permanent head of the FAA who understands the aviation industry as well as the agency\u2019s role in passenger safety. \u201cThere\u2019s no reason why the administration can\u2019t find a man or a woman that fits those qualifications,\u201d Moran said.<\/p>\n
The Candy Shop (9:53 a.m.)<\/p>\n
Steven Udvar Hazy, the self-proclaimed godfather of the aircraft leasing industry, expects the air show to be all about \u201cmega orders,\u201d while cautioning that the deals \u201cmay or may not be delivered.\u201d Speaking on the first day of the show, the CEO of Air Lease Corp. likened the Paris Air Show to \u201ckids in a candy shop\u201d as airlines rush to place order in an increasingly supply-constrained market.<\/p>\n
GTF Optimism (9:01 a.m.)<\/p>\n
Pratt & Whitney \u201chas a great story to tell about where we are, where we\u2019re going and what we need to do\u201d with the GTF engine that\u2019s seen durability issues on Airbus A320 and A220 aircraft, Greg Hayes, chief executive officer of parent Raytheon Technologies Corp., said at an investor day presentation in Paris. No new narrow-body introductions until the mid-2030s means the GTF will be produced for much longer than originally anticipated, \u201cwhich means a much longer afterlife\u201d for in-service aircraft, he said.<\/p>\n
Raytheon on Sunday reaffirmed its financial outlook for this year, expanding its commitment to return $33 billion to $35 billion to shareholders through 2025 in the form of dividends and stock buybacks, after the merger with United Technologies.<\/p>\n
Read more: Airlines Are Rankled About Pratt & Whitney\u2019s Jet Engine Problems (1)<\/p>\n
Narrow-Body Talks<\/p>\n
Airbus is in talks to land a large narrow-body deal from Mexico\u2019s Grupo Viva Aerobus, Bloomberg News reported Sunday, citing people familiar with the matter. Negotiations could wrap up at the show this week, they said, giving the fast-growing budget carrier the means to expand its footprint in Latin America.<\/p>\n
Separately, IndiGo is set for a landmark order as it expands its fleet to accommodate surging demand in India. Bloomberg News reported that the company may order 500 aircraft as soon as today.<\/p>\n
<\/p>\n
Saudi Plans<\/p>\n
Saudi startup Riyadh Air is shopping for narrow-body aircraft and is \u201cactively engaged\u201d in talks, with the two major planemakers vying for the sale, said CEO Tony Douglas, confirming a Bloomberg News report from late May. The airline has brought over an airliner to Paris to show off its new livery, an unusual hue of dark lavender that the carrier says will set it apart at airports.<\/p>\n
Keeping Up With Demand<\/p>\n
Aerospace manufacturers were whipsawed by the Covid-19 pandemic, shedding staff as aircraft demand evaporated, then racing to hire workers back to meet a post-pandemic stampede of orders. As Airbus and Boeing strain to lift production, their top executives gave updates on the state of their effort to overcome stress on their elaborate manufacturing networks.<\/p>\n
Companies at the bottom of the supply chain are proving to be the weakest links in the effort to ramp up output, Airbus CEO Guillaume Faury told reporters on Friday. \u201cIt\u2019s really the ramp-up that\u2019s at stake,\u201d with suppliers in tiers 4 through 6 \u2014 who provide parts used in larger aircraft assemblies \u2014 struggling to access capital and sufficient staff.<\/p>\n
Airbus is deploying its own staff to the factories of smaller suppliers but that\u2019s not a long-term solution, Faury said. He\u2019s most concerned about the US, where \u201cwe continue to see more critical situations when it comes to both labor and balance sheets.\u201d<\/p>\n
Boeing Steps It Up<\/p>\n
Boeing Co. is preparing to accelerate production of its cash-cow 737 jets to 38 units a month \u201csooner rather than later,\u201d the planemaker\u2019s commercial chief, Stan Deal, told reporters on Sunday. The move will boost revenue at the US planemaker after a supplier defect slowed output of the the single-aisle jetliner.<\/p>\n
Boeing is also getting its arms around a supplier issue with the 787 Dreamliner, another major source of cash. It\u2019s shipped the first of its wide-body jetliners that had its horizontal stabilizer bar inspected and repaired, Deal said.<\/p>\n
At the same event, defense chief Ted Colbert expects the unit to post a second-quarter margin in line with the negative 3.2% operating loss reported in the first quarter.<\/p>\n
–With assistance from Guy Johnson and Fahad Abuljadayel.<\/p>\n","protected":false},"excerpt":{"rendered":"
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