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By Julian Moxon in London

Two years is a long time in aerospace. At the last Farnborough, Noel Forgeard was in denial about the possibility of Boeing launching an aircraft called the 7E7. “There probably will be a 7E7,” the then Airbus chief executive said, “but we do not need to react to a reaction.”

So, in 2004, Airbus was content to offer the A330-200 as its competitor in the medium-range widebody market. Now, Boeing is riding high on the back of 350 orders for the 787, and Airbus has been forced to come up with a virtually all-new aircraft, the A350/A370. Toulouse is putting a brave face on the situation, but at Farnborough it will have some explaining to do to A350 customers while its flagship A380 soars quietly in the skies above.

This year Farnborough International (FIL), the new company formed to manage the air show, promises a “bumper event”. While it is partly the result of a more dynamic approach, it is also because this year’s show coincides with an extremely rare event. It is the first time in at least two decades that both the civil and military sectors are in a market upswing. “We haven’t seen anything like it since the early 1980s,” says Teal group analyst Richard Aboulafia.

Battle of words

Some things never change, however. Visitors can expect the usual battle of words between Airbus and Boeing, who at the beginning of the show will trot out their latest sales claims while shouting from the sidelines about unfair subsidies. There will also be the usual deafening roar as fighter aircraft take to the skies just as post-prandial discussions are getting interesting. And there will be the usual pile-up of traffic struggling to get into and out of the show. To avoid complaints about the noise, FIL has promised that flying on trade days will not begin before 14:30. It also says it has made a major effort to improve access.

The last Farnborough ended with the usual dire warnings about the diminishing need for two major European events. The calls for Farnborough to be slimmed down became ever more strident, especially from continental Europeans for whom the change of date from September has meant an untimely return from their summer holidays. More seriously, the show has become less of a forum for deal making, the industry having gone through its major post-Cold-War consolidation, with manufacturers concentrating more on cost cutting and improving efficiency.

The big question at the end of the 2004 Farnborough was about who would manage the next event, with rumours that the Society of British Aerospace Companies (SBAC) was planning to outsource it, and the UK’s Reed Exhibitions and Montgomery Exhibitions the front runners. In the end, the SBAC decided to form a wholly owned subsidiary, FIL, headed by managing director Trevor Sidebottom. “We listened intently to our staff, members, exhibitors and stakeholders and came up with a proposition that will not only retain our reputation as a premier international aerospace show, but which will enhance our standing among the global aerospace industry,” says SBAC director general Sally Howes.

The result has been a major shake-up across the board (see opposite page), which has left no doubt that Farnborough is not only here to stay, but intends to compete head-on with the Paris air show. This aggressive posture is revealed in the pre-show publicity, which claims the 2006 Farnborough will be “the world’s largest aerospace event”. FIL admits that “largest” actually refers to the amount of real estate dedicated to the show, not the number of exhibitors. Although this year’s Farnborough is expected to set a record of 1,360 exhibitors, the number is still well below the 1,926 at Paris in 2005. Farnborough also has fewer aircraft on display and in the air, with 160 bookings at the time of writing against 238 at Paris 2005. Nevertheless, the figures are impressive when compared with 2004, with 112 more exhibitors, three new countries (Greece, Spain and Mexico) and major expansion of the corporate business park, which was a success in 2004.

Industry boom

The US industry comes to the show after a record year in 2005 in which sales increased by 9.2%, to $170 billion. Orders for commercial airliners tripled compared with 2004, Airbus and Boeing together posting orders for 2,050 aircraft. The Aerospace Industries Association (AIA) predicted in December that the momentum would continue this year at a similar rate. “Most of that growth is related to the rapid expansion and recovery of the civil aviation sector,” said AIA president John Douglass. As for defence, he added: “We’re not sure how much it might grow, but we don’t see it shrinking significantly.” US defence sales rose by 7% in 2005, to $50 billion, missile sales were up 4% and space spending 3.8%.

In Europe, the picture is similarly healthy, with 2005 sales across all sectors rising 8.6%, to 113 billion ($136 billion), orders increasing by 46% and employment up to 614,000. The research and development sector was less promising, however, with expenditure as a percentage of turnover down by 4.5%, to 10.6 billion, a figure that is stimulating debate over the need to co-ordinate national R&D efforts. At the recent ILA show in Berlin, AeroSpace and Defence Industries Association of Europe (ASD) president Tom Enders complained about the lack of co-ordinated or common research and technology activity, saying this was “the second major obstacle standing in the way of better use of public funds in Europe, thereby creating conditions for a globally competitive European defence industry”.

The Farnborough show takes place shortly after the signing on 1 July of the deal forming the new European defence equipment market, meant to make the continent’s market more competitive. Under the agreement, brokered by the two-year-old European Defence Agency, the 22 signatory states have established a voluntary scheme encouraging the reciprocal application of competition in this segment of defence procurement. Subscribers will undertake to open up procurements of more than 1 million to suppliers having a technological/industrial base in each others’ territories.

The decision by BAE Systems to sell its 20% stake in Airbus will provide plenty of discussion at the show, particularly following its decision to exercise its put option on 80% owner EADS.

Other industry developments since the last show include the continued success of very light jets, most recently seen in Europe with the JetBird launch order for 50 Embraer Phenom 100s. The long-awaited certification of the Eclipse 500 VLJ is due shortly, which is likely to stimulate even more orders in a market that at Farnborough 2004 had yet to show it was really going anywhere.

As the aerospace industry celebrates its best performance in years, it seems the Farnborough organisers might be justified in describing this year as a “bumper show”.

Source: Flight International