Deals put wind back under sector’s wings

Even the notoriously unpredictable British weather played its part as the aviation industry enjoyed one of its best weeks for more than three years.

Every year, the great and good of the aerospace sector gather in either Farnborough or a northern suburb of Paris to broker deals, catch up on old contacts or rub shoulders with Whitehall decision-makers.

The biennial airshow in Farnborough is the key event of the aviation calendar but in the last three years the gatherings have been something of a damp squib, with few deals announced.

In 2006, the numbers were mind-blowing, with multi-billion dollar deal after multi-billion deal announced by the two big hitters of the sector, Airbus and Boeing.

There was no warning the biggest global recession in living memory was just around the corner and that the airlines were to suffer the worst years of trading since the aftermath of September 11.

Two years ago Farnborough was a muted affair with the big companies opting to stay away – no one wanted to be seen splashing the cash when redundancies were being announced and routes axed.

Last year, with the airshow moving to Le Bourget, the crowds were treated to a soaking as they queued at the entry gates and there was little sign of the good times returning.

But this week the mood at Farnborough was definitely upbeat, with the sector, which is so vital to the South West, once again preparing itself for a return of the good times. And even the sun came out for the crowds.

For the uninitiated and the outsider, the annual airshows are odd affairs but for industry leaders and VIP guests they are a chance to celebrate while multi-million lumps of metal roar overhead.

Smart-suited businessmen from just about every corner of the world and glamorous women are ferried around on golf buggies.

The industry leaders are treated to endless schmoozing in the hospitality chalets.

This is corporate hospitality at the top end – after all, despite the recession, Middle Eastern airlines and defence companies still have plenty of cash. Where else would you get a fleet of top-of-the-range Land Rovers specially imported to ferry around guests?

Alongside the industry insiders, there are the amateur enthusiasts who would travel anywhere at any expense for the chance to get see to see the latest plane in all its glory.

But despite the feeling that this is one big party, serious business is taking place that will affect jobs and livelihoods for the next two decades. What is agreed in a hospitality chalet in Farnborough can protect hundreds of jobs at Filton and lead to more wealth flooding into the region.

Star of the show this year was undoubtedly Boeing’s new Dreamliner. Up close, the new plane looks disappointingly like any other aircraft, but this is the plane that is shaping up to change the industry. The composite structure means it can fly further on less fuel and will open up smaller airports such as Bristol to long-haul destinations.

Not to be outdone, Airbus announced orders worth more than $10 billion for its A320. It cannot be denied that the European airlines are still not extending their fleets but life is definitely returning to the marketplace. Boeing announced a $9.1bn (£6bn) order for 30 777-300ERs from Emirates Airlines followed by Airbus announcing deals worth an estimated $12 billion.

Tom William, Airbus’s most senior man in the UK, said: “We are definitely looking to increase production in November and the market is improving. The problem is still finance, and we need to work more closely with the airlines on this.”

Asked about the role of the Government, he said: “We need the politicians to take a long-term view so we can put our plans into place and act on them.”

Tom Enders, the man in charge of Airbus and major projects such as the A400M, echoes the sentiment. He said: “Our business is long-term, it has long cycles. These are products that are going to be flying 40 or 50 years from now, and we are optimistic we have got it right in terms of the long-term trends.

Business Secretary Vince Cable had the task of opening the show, warning of defence cuts.

He added: “We are in discussions with the Treasury about the scale of the economies we need; it would be unfair to say any more than that until the review has been carried out.”

But at the same time he did pledge Government backing for the sector and praised the work of firms such as Airbus and Rolls-Royce at Filton.

The Business Secretary urged young people to enter the industry and vowed to help them through the expansion of aerospace apprenticeships at advanced and higher levels, including engineering.

The region’s aerospace sector has an annual turnover close to £7 billion and is home to a number of major players including Rolls-Royce, whose engines power the Boeing 787 Dreamliner.

Orders for Airbus aircraft announced at the Farnborough Airshow included Hong Kong Airlines signing a memorandum of understanding (MOU) with Airbus for 15 A350 XWBs and ten more A330-200s.

Under the terms of the agreement, the airline is converting 15 existing A330 orders to A350 XWBs and placing an additional order for ten A330-200s.

Also, Chilean carrier LAN Airlines signed an MOU for 50 planes from the Airbus A320 family of aircraft, including ten A321s.