Singapore air show kicks off with orders for China's COMAC, Boeing
Reuters
Published Feb 19, 2024 08:45PM ET
Updated Feb 20, 2024 09:53AM ET
By Lisa Barrington, Brenda Goh and Joe Brock
SINGAPORE (Reuters) -Singapore on Tuesday kicked off Asia's biggest aviation gathering with orders for China's COMAC and Boeing (NYSE:BA) planes as the industry grapples with a rebound in post-pandemic travel demand in the face of severe supply constraints.
More than 1,000 companies from more than 50 countries are participating in the biennial commercial and defence-focused Singapore Airshow, led by Western industry giants such as Airbus, Boeing and Lockheed Martin (NYSE:LMT) and their Chinese competitors such as COMAC and AVIC.
Russian companies such as Russian Helicopters and Irkut that attended past editions of the show are not participating this year amid the war in Ukraine. However, Israeli companies Israel Aerospace Industries and Rafael Advanced Defense Systems, which dropped out of the Dubai Airshow in November amid the Israel-Hamas war in Gaza, are in attendance.
Trade delegates donned hats and sunglasses on a hot, clear day to watch flying displays featuring military aircraft from Singapore, Australia, India, Indonesia, South Korea and the United States, as well as the COMAC C919 commercial jet and an Airbus A350-1000 powered by 35% sustainable aviation fuel.
COMAC, which brought its self-developed C919 narrow-body jet outside Chinese territory for the first time to the show, posted the first aircraft orders of the event on Tuesday morning, with China's Tibet Airlines finalising an order for 40 C919 single-aisle planes and 10 ARJ21 regional jets, and China's Henan Civil Aviation Development and Investment Group ordering 6 ARJ21s.
Royal Brunei Airlines later announced a firm order for four Boeing 787-9 Dreamliners, while the U.S. planemaker also held a signing ceremony to mark a recently placed order for 45 of the wide-body planes by Thai Airways.
Given its timing early in the year, there are typically fewer major order announcements at the Singapore air show than at its counterparts in Paris, Farnborough and Dubai.
By the end of 2023, travel demand had made a near-full recovery from pre-pandemic levels in 2019, with domestic travel running 4% higher than pre-COVID levels and the international market lagging at 88% mostly because of China's slower rebound, according to International Air Transport Association data.
"We see 2024 as a real return to normal," said Steven Townend, the CEO of Singapore-based aircraft lessor BOC Aviation. "The industry is growing, airlines are making money again on a global basis. For 2024, we're really positive."
SUPPLY CHAIN STRUGGLES
Major suppliers, planemakers and engine producers have struggled to keep up with the rebound in demand after the sharp downturn during COVID-19 led to job losses, freight snarls and an industry skills shortage.
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Boeing, in particular, is under scrutiny after the mid-air blowout of a cabin panel on an Alaska Airlines 737 MAX on Jan. 5 led the U.S. Federal Aviation Administration to take the unprecedented step of freezing production of its best-selling single-aisle plane at 38 per month.
Airbus this month announced a further delay in entry to service of its long-range A321XLR single-aisle jet to the third quarter from the second. Suppliers told Reuters that Airbus is producing about 50 A320neo family jets a month compared with a production plan that had foreseen 58 by end-2023.
Christian Scherer, the CEO of Airbus' commercial aircraft business, said on Tuesday there were many "pinch points" in the aerospace supply chain.
"The production ramp-up is putting pressure into the supply chain everywhere and it is our job to tackle it," he told reporters, adding that Airbus had deployed several dozen supply chain engineers to unlock bottlenecks.
The production issues are delaying the ability of airlines to replace older jets with more fuel-efficient models as the industry looks to meet its goal of "net zero" emissions by 2050.
Airlines are also looking to buy as much sustainable aviation fuel as possible to reduce their carbon emissions, even though it costs up to five times as much as conventional jet fuel.
In Singapore, travellers will bear the cost of the transition towards green jet fuel, its transport minister said on Monday, as he announced the city-state's plans for a levy on departing flight ticket prices from 2026.
Written By: Reuters
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