MAX KINGSLEY-JONES
Farnborough 2002 posed some challenging questions for the aerospace industry. What are the long-term prospects for the commercial airliner market? What will happen next in the volatile regional jet market? Can the USand European defence industries trulyco-operate? Are pan-industry events such as Farnborough appropriate showcases for narrowly focused industries like business aviation? Flight International takes a look behind the scenes in the search for some answers.
Both Airbus and Boeing expect demand for airliners to begin recovering in 2004
The annual air show war of words between Airbus and Boeing was more subdued at Farnborough 2002, as neither could muster major orders to boast about. With the Airbus A380 and Boeing Sonic Cruiser now "old hat", and airlines not in a buying mood, the two rivals spent the week talking up future prospects as they looked forward to an industry upturn from late next year.
Boeing's efforts to reassure the world that the Sonic Cruiser programme was still alive were undermined by the absence of a forecast for demand for the high-speed airliner in the company's latest 20-year market outlook, unveiled at Farnborough. Last year, the US manufacturer had the excuse that plans for the new aircraft emerged too late to incorporate in its 2001 outlook - but this year it had no such pretext. "We have still to figure out the value of speed," said vice-president of marketing Randy Baseler.
The US manufacturer's admission it has not yet determined what value the Sonic Cruiser's 20% reduction in journey times will have to the passenger was a theme of the show. "There are lots of [airline] opinions about this and there have been some intense discussions," said Boeing Commercial Airplanes chief executive Alan Mulally. "We don't yet know the answer." This issue, rather than the technical hurdles, will decide the future of the Mach 0.98 airliner project, says Boeing.
Airbus vice-president of market forecasts Adam Brown questioned Boeing's claim that it lacks information on the value of speed, pointing to an extensive study into the importance of reduced journey times commissioned by the US manufacturer in 1993 as part of its high-speed commercial transport project: "Perhaps they've forgotten, but the study determined that there is no value until you save 2.5h," he said.
Despite the Sonic Cruiser's omission, Boeing's latest outlook is 2% up on the 2001 forecast, predicting a market for 23,250 new airliners and 680 freighters over the next 20 years. The manufacturer estimates this will be worth $1.8 trillion in 2001 dollars. Traffic growth will account for 17,220 of these deliveries, while 6,700 will replace aircraft that will be retired. Global passenger traffic is expected to grow at 4.9% annually, while cargo traffic will expand by 6.4% a year.
Boeing predicts that the significant changes in the distribution of deliveries between aircraft size categories will be a reduction in 400-plus seaters from 7% of the world fleet to 4%, and an increase in smaller regional jets from 10% to 17% of the fleet.
The company's overall market forecast for large aircraft has declined again, dropping from last year's 1,091 to 944. Within this "747 and larger" category, Boeing predicts demand for 334 aircraft of A380 size (similar to a year ago) and 220 freighters. The company does not see any significant market for this size of aircraft until the second decade of the forecast.
Airbus has not updated its annual global market forecast since 2000, as last year's was cancelled following the 11 September attacks. This makes direct comparisons academic until Airbus publishes its new forecast in September. But according to Brown there has been no "substantial shift" in the European manufacturer's forecast of demand for ultra-large aircraft, last stated at 1,240 airliners - over three times that forecast by Boeing - and a further 300 freighters.
The cornerstone of Boeing's pessimistic forecast for very large airliners is its conviction that future long-haul fleets will be made up of more, smaller aircraft, rather than fewer, bigger machines. Analysts argue that the US manufacturer is bound to have a depressed view of the market as it does not offer a viable long-term alternative to the A380.
In support of Boeing's view, Baseler said: "The route fragmentation we've seen on the Atlantic will be replicated on the Pacific. Growth will be met by increases in non-stop flights [between more airport pairs] and by greater frequency, not by increased aircraft capacity. However a small number of very large aircraft will be needed for a few dense routes."
Lloyd Thompson, president of the General Electric and Pratt & Whitney Engine Alliance developing the GP7000 engine for the A380, thinks the market for the aircraft is "north of 700 over 20 years - and maybe more". This is similar to the view of Airbus, which has publicly stated its intention to capture around 50% of the 1,540 sales foreseen in its last market forecast.
Airbus chief commercial officer John Leahy is confident the A380's orderbook will grow beyond the current 97 firm orders from nine customers, by "one customer a year" through to the first delivery in 2006.
In the shorter term, both manufacturers are confident the market will begin to recover from its downturn by the end of next year, which should allow their output to begin to increase in 2004. Deliveries this year are predicted to total around 680 airliners and fall to 600 - split equally between Airbus and Boeing - in 2003.
"If airlines begin to return to profitability in mid-2003, then orders should start to come back late next year," said Baseler. This will allow for output to start to ramp up from late 2004, but demand will be dependent on the retirement of ageing airliners to reduce excess capacity.
Source: Flight International