Boeing under pressure over deals as Farnborough International Airshow returns

US plane maker is trailing behind rival Airbus and has continuing problems with a number of aircraft

Boeing will be keen to catch up with Airbus and strike new commercial deals. AFP

As the aerospace world gathers in southern England next week for the first major commercial show since 2019, the stakes are particularly high for one half of the global plane-making duopoly.

As ever, the spotlight at the Farnborough International Airshow will focus on the battle between Airbus and Boeing for orders, with rapid-fire, often last-minute announcements providing reassuring parallels to the pre-Covid trade expos that alternate between London and Paris. But never before has the contest been skewed so far in Airbus’s favour.

Airbus has bolstered its heft in the past decade to conquer close to 70 per cent of the narrow-body segment, by far the most widely used aircraft category.

Boeing, meanwhile, is battling on multiple fronts: there are quality issues with its 787 Dreamliner, questions over the regulatory approval of its Max 10 aircraft and the need to make sales of the 737 Max after a lengthy grounding following two fatal crashes. The giant successor to the 777 is years behind schedule.

Farnborough Airshow through the years - in pictures

The Farnborough Airshow in Hampshire has played host to the latest and greatest from the aerospace industry since 1948. Here, 'The National' takes a look back at 74 years of aviation. All photos: Getty Images

An Avro Lincoln, developed from the Lancaster bomber, on display at the 1948 Farnborough Airshow.

A formation of RAF de Havilland Vampire jets in flight at the Farnborough Airshow in 1950.

A young visitor stands by the wheel of an Avro York transport plane at Farnborough Airshow in 1950.

A child is carried away from the scene of a crash at the Farnborough Airshow in 1952. A prototype de Havilland DH 110 jet fighter crashed during a display, killing 27 people.

Prince Philip, Duke of Edinburgh, inspects aircraft at the Farnborough Airshow in 1952.

The Handley Page Victor, a four-jet crescent-wing bomber that became part of the UK's V Bomber nuclear force along with the Vulcan and the Valiant, makes an appearance at the Farnborough Airshow in 1953.

Farnborough Airshow crowds and dignitaries watch RAF Hawker Hunter jets perform a display in honour of the Royal Aircraft Establishment's jubilee in 1955.

A cameraman stands on the roof of his estate car to get footage of the 1956 Farnborough Airshow.

A Hawker Hunter equipped with rockets flies over the Farnborough Airshow in 1956.

Visitors queue to have a look inside a Bristol freighter at the 1956 Farnborough Airshow.

Enthusiasts stand on chairs in the rain to get a better view of the aircraft as they fly past at the Farnborough Airshow 1956.

A formation of 16 Hawker Hunter jets of a Royal Air Force aerobatic team flying at the Farnborough Airshow in 1959.

A Saunders-Roe hovercraft, with a group of Royal Marines on board, on display Farnborough Airshow in 1959.

A Westland Widgeon helicopter hovers above the Farnborough Airshow crowd in 1959.

Spectators shield their eyes against the sun at Farnborough Airshow in 1959.

A worker cleans a transparent model of the supersonic passenger airliner Concorde at a British Aircraft Corporation exhibit at Farnborough Airshow in 1966.

Smoke rises after a French Navy long-range maritime patrol Breguet 1150 Atlantic aircraft crashed into buildings at the Farnborough Airshow in 1968. Five crewmen were killed.

Members of the RAF's Macaws, the College of Air Warfare's Jet Provost T-4 aerobatic display team, at Farnborough Airshow in 1972.

Pilots Maj James V Sullivan and Maj Noel F Widdifield of the US Air Force meet the press at the Farnborough Air Show in 1974, after setting an air speed record by flying the Lockheed SR-71 Blackbird from New York to London in less than two hours.

The Lockheed SR-71 Blackbird in 1974.

A prototype Concorde takes off from Farnborough Airshow in 1974.

The Westland Wisp, a radio-controlled, unmanned miniature helicopter designed to take pictures in dangerous and difficult to reach places, on display at Farnborough Airshow in 1976.

A Hawker Sea Harrier and a 'ski jump' launcher on display in at Farnborough Airshow in 1978.

Prince Charles, with his brothers Prince Andrew and Prince Edward, inspect the Tornado multi-role combat aircraft and its payload at Farnborough Airshow in 1978.

A US Air Force B-2 Spirit bomber approaches a KC-135R Stratotanker for refuelling for the flight back home after the stealth aircraft made a 21 hour non-stop round-trip flight to make a fly past at the 1996 Farnborough Airshow.

In 2000, the Battle of Britain Memorial Flight, consisting of an Avro Lancaster bomber, a PR XIX Supermarine Spitfire, and a MkIIc Hawker Hurricane, was at the Farnborough Airshow.

The new Airbus A380 double decker airliner comes in to land over a double decker busses in the 2006 Farnborough Airshow.

The tilt-rotor Bell/Boeing V-22 Osprey manoeuvres at the Farnborough Airshow in 2006.

An member of the Italian Air Force crew demonstrates the capabilities of the Typhoon Eurofighter during a flight simulation at Farnborough Airshow in 2010.

Members of the public look inside a JF-17 Thunder jet fighter developed by Pakistan and China at 2010's Farnborough Airshow.

The Blades British civilian flying display team perform at Farnborough Airshow in 2010.

A crew from Wattisham army base in Suffolk with an Apache AH1 Helicopter at Farnborough Airshow in 2010.

A Typhoon Eurofighter touches down at Farnborough Airshow in 2010.

An Airbus A380 comes into land after putting on a performance for the crowds at Farnborough Airshow in 2014.

A visitor sits in a model of a Lockheed Martin F-35 Lighting stealth fighter, which was big news at Farnborough Airshow in 2014.

Military helmets on display at the Farnborough Airshow in 2014.

Visitors take pictures as an Airbus A380 performs for the Farnborough Airshow crowd in 2014.

Evolving technology: high-performance remote-controlled aerial target drones used by the US Air Force on display at Farnborough Airshow in 2014.

British prime minister David Cameron meets aircrew at the Farnborough Airshow in 2016.

Britain's Red Arrows fly in formation around a Spitfire at the Farnborough Airshow in 2018.

British prime minister Theresa May talks with guests as she opens the 2018 Farnborough Airshow. An Airbus A-400 Atlas looms in the background.

That leaves Boeing facing much greater pressure to secure orders in Farnborough, Jefferies analyst Sheila Kahyaoglu says.

“Boeing is starting off a lower base in terms of order momentum,” she said. If Boeing can’t beat Airbus at the show, “it will continue to erode their market share”.

Both Airbus and Boeing have already announced a flurry of significant deals this year, which may limit how many blockbuster sales there are left to do in Farnborough. IAG finally committed in May to a 737 Max order first agreed to at the Paris Air Show in 2019, while Airbus landed a massive deal valued at $37 billion from four Chinese airlines last month.

Ms Kahyaoglu counts about 800 potential sales still in the pipeline, though she says they’re unlikely to all come together next week.

Some of the bigger anticipated deals are tipped to go in Boeing’s favour, including a potential Delta Air Lines order for more than 100 737 Max, marking the first time the Atlanta-based carrier has bought Boeing’s newest narrow-body jet. Airbus could also scoop up a few commitments from the airline, however, if Delta opts to top up its A220 order at the same time.

Analysts and investors will also be looking for signs that Asian airlines are laying plans for the eventual rebound in long-range travel — such as ANA Holdings’s decision this week to finalise a previous commitment for as many as 30 of Boeing’s 787 Dreamliners.

Air India is close to signing an agreement for an order of about 20 A350 widebody jets and as many as 300 A320neo family jets or 737 Maxes, Bloomberg reported last month.

This year, the aviation titans will also be quizzed on how and when they’ll make good on delivery commitments, with engine shortages emerging as the latest headache in their efforts to increase output.

And while air travel has come roaring back, driving up demand for aircraft, the longevity of the boom is in question with rising inflation cutting into consumer spending and understaffed airlines and airports turning travel into an ordeal particularly in Europe.

Boeing 777X at the Dubai Airshow

A Boeing 777X aircraft performs a demonstration flight at the 2021 Dubai Airshow. AFP

Attendees stand by the ramp leading to the Boeing 777X demonstration aircraft at the 2021 Dubai Airshow. AFP

The "777" logo on the empennage (tail fin) of the Boeing 777X demonstration aircraft at the 2021 Dubai Airshow. AFP

The folding wingtips of the Boeing 777X demonstration aircraft at the 2021 Dubai Airshow. AFP

A man walks beneath the underbelly of the Boeing 777X demonstration aircraft at the 2021 Dubai Airshow. AFP

The folding wingtips and the fuselage of the Boeing 777X demonstration aircraft at the 2021 Dubai Airshow. AFP

The folding wingtips of the Boeing 777X demonstration aircraft at the 2021 Dubai Airshow. AFP

A Boeing 777X aircraft performs a demonstration flight at the 2021 Dubai Airshow. AFP

A crowd watches a Boeing 777X fly at the Dubai Airshow. AP Photo

“The air show will reinforce that the problem is not demand, it is supply,” said Rob Stallard, analyst with Vertical Research Partners. “So far, the aerospace industry has done a good job battling with supply chain strain, but the pressure is unlikely to ease any time soon.”

The aerospace duopoly itself has undergone a sea-change since the last in-person air show in Paris in 2019. At the time, Boeing was coming off the strongest financial performance in its history and executives were upbeat about their prospects for quickly ending a grounding of the 737 Max that had been instituted after the first crash in Indonesia a few months earlier.

Instead, it was Airbus that grabbed the market lead — and never looked back — as the Max flying ban extended through November 2020. And while the Covid outbreak pummelled both manufacturers, Boeing was especially vulnerable because of its $20 billion tab to resolve its Max-related costs.

Boeing shares have tumbled 60 per cent since the Paris Air Show in June 2019 as the company worked to restore the 737 Max commercially and encountered delays and quality lapses on other aircraft programmes, such as the 777X and 787 Dreamliner. Airbus’ shares are down 20 per cent over the same period.

With Farnborough, the US plane maker finally has an opportunity to start to turn the corner. Boeing is also closing in on winning US regulators’ approval to restart 787 Dreamliner deliveries that have been largely halted since late 2020, a critical step toward generating cash from the 120 or so Dreamliners stockpiled in desert storage yards.

Ms Kahyaoglu doesn’t see either plane maker launching new products at the show but thinks the event could provide an opportunity for the US manufacturer to give an update on the 737 Max 10 certification, after Boeing chief executive Dave Calhoun threatened to cancel the aircraft if regulatory issues aren’t resolved. On the Airbus side, the A321XLR also faces a hurdle as European regulators seek to lessen the fire risk from an extra fuel tank.

Ultimately, any success at the show comes down to who pulls in the most sales. But given the number of commitments Airbus already has on its books, it's less of a high-stakes battle than it is for the US plane maker.