Farnborough International Air Show opens for business in an uncertain environment

14 Jul 2008

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London: The state of the $60 billion international civil aviation industry will get reflected at the prestigious Farnborough International Air Show, when it opens for business and display on Monday. Located near London, the biennial event this year may likely reveal the direction in which the international aviation industry is headed given the current turmoil arising from the high cost of fuel. For once, the show will not be just an arena for the traditional battle between commercial aircraft manufacturers Boeing and Airbus.

On the face of it Middle East countries are likely to consolidate their position as the new power centre in aviation, through large orders for commercial planes at the week long show. Etihad Airways, the national carrier of the United Arab Emirates, has said it is likely to announce huge orders of between 50 and 100 aircraft at Farnborough.

So also International Lease Finance Corporation (ILFC), the world's biggest aircraft lessor, which may likely place orders for about 300 planes with Boeing and Airbus. The orders may be placed at the show itself, if ILFC feels it is getting the right pricing.

In the case of the MidEast countries atleast, these orders will be coming on the back of record profits earned by them through the export of oil. The commodity is currently hovering in the range of $147 a barrel.

There is a perception that likelihood of orders for aircraft coming in from countries that are now reeling under the impact of inflation, credit crunch and slowing or negative economic growth, is dim. Analysts forecast that in terms of orders atleast the show will likely be more low key than its last edition in 2006.

This impression is contested by manufacturers, who argue that record crude prices could in fact spur airlines to invest in larger numbers of more fuel-efficient planes, such as the Airbus A380 and A350, as well as Boeing's Dreamliner. Boeing officials say that they are seeing a larger need amongst airlines for replacing older, less efficient aircraft.

Some 1,500 companies from 35 countries will be attending the show.

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