Wednesday, October 4, 2023

High-Stakes Paris Airshow Sees Intense Negotiations Amid Supply Chain Struggles & Geopolitical Tensions

By Aritra Banerjee

As the Paris Airshow commenced today, the tumult of final-hour jet order negotiations and logistical supply chain difficulties shared centre stage with an array of missiles, drones and state-of-the-art transportation.

The prestigious air show, the world’s largest and a biennial event alternated with Farnborough in the UK, returned to Le Bourget after a four-year hiatus, with its 2021 edition thwarted by the Covid-19 pandemic.

French President Emmanuel Macron made a notable entrance, arriving at the bustling aerospace extravaganza via helicopter. Macron was an audience to a thrilling flight demonstration that included Airbus’s cutting-edge jet, the A321XLR, and formidable air power including the French Rafale fighter.

French President Emmanuel Macron making an entrance at the Paris Airshow

The US F-35 fighter was slated for a display later the same day.

Belgium expressed interest in joining, as an observer, the potential successor to the Rafale and the multinational Eurofighter, known as the Franco-German-Spanish FCAS fighter project. This interest remained despite disagreements among industrial partners over the proposed expansion of the project.

The air show’s atmosphere was tinged with the ongoing Ukraine conflict, marked by the conspicuous absence of any Russian presence in the chalets and exhibition halls, a stark contrast to the previous event.

Anticipation ran high for the expected presence of Ukrainian officials and aerospace companies.

French multinational company Thales announced an Indonesian contract for 13 long-range air surveillance radars.

On the commercial side, plane manufacturers came prepared for the surge in demand expectations. Airlines are hurriedly seeking to increase capacity to meet soaring demand, all the while aiming for net zero emissions by 2050.

However, suppliers face the daunting task of fulfilling these demands amid rising costs, parts shortages and a dearth of skilled labour, consequences of the pandemic aftermath.

Airbus is projected to announce a record order for 500 narrow-body jets from India’s budget behemoth, IndiGo, barring any last-minute disputes.

Insiders estimate that the resurgence of the commercial jet market could see as many as 2,000 jet orders worldwide, aside from those already announced provisionally, as airlines scramble to compensate for the plummet in activity during the pandemic.

Only a fraction of these potential new deals are expected to materialise in time for this week’s air show, which may showcase a combination of new and repeat announcements.

Airbus is expected to confirm that Australian airline Qantas is executing options for an additional nine A220s.

“Year-end order book is the real game,” observed Sash Tusa from Agency Partners.

The aviation giant is also on the brink of securing a significant order for narrow-body jets from Mexican budget airline Viva Aerobus, according to sources. The number of planes under negotiation exceeded 100, although by Monday, insiders hinted that the final deal might settle closer to 60.

Viva Aerobus has been a fierce competitive field for Boeing and Airbus for some time.

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