It was suppose to be a quiet affair, but this year's Farnborough Airshow isn't working out the way many analysts predicted. The big event of the year for plane makers seeing a stream of big deals, orders for over 300 jets announced on just the first day of the show.
Total value? Over $40 billion. On day two, the orders kept coming. There were good reasons to think it wouldn't be this way. After all, airlines already have over 15,000 new jets on order. Together, Airbus and Boeing have a business backlog totaling over $1 trillion. Then there's the looming global trade war.
In these circumstances, how can airlines afford or need many more of these things? But airlines are staying positive. The industry has just seen a year of record profits. Low interest rates mean they're well-placed to finance big deals. One big X factor though.>> I am concerned about the oil prices.
I hope that nobody will make some wrong move, which will create the tension around the world, which will in effect make oil prices grow.>> Oil is one of an airline's biggest costs, but a higher price can also help to sell new jets which use much less fuel.
Underlying all this is seemingly endless demand.>> Ticket prices have come down significantly over the last ten years and there's a new segment of travelers, especially in Europe. It's young people who are traveling on a plane which were traveling maybe not at all or were traveling on trains and there's so much more passengers.
>> The International Air Transport Association says passenger numbers will double over the next 20 years or so. For Airbus and Boeing, the orders may one day dry up. That day won't come this week.