The recent wave of mergers, and potential mergers, in the aviation industry have raised their fair share of criticism and analysis, with concerns over monopolies and raised fares being voiced, amid fears that the commercial aviation industry may be in trouble. However, the deals struck at the biennial Farnborough International Airshow, held on 19-25 July 2010 in Hampshire, England, indicate, not only recovery, but that there is huge potential for this market sector to keep growing. On Friday organizers announced that deals to the value of $47 billion took place during the well attended event, and while this is below the figure of $88.7 billion for 2008, when the event was last held, it is nevertheless seen as an encouraging indicator that the recession has not done quite as much damage to the aviation industry as many feared. This is especially heartening in the light of the fact that the Le Bourget/Paris Airshow, which alternates annually with Farnborough, only signed up a disappointing $7 billion worth of deals in 2009.
Rivals Boeing and Airbus pulled out all the stops to attract would-be customers. It was reported that Airbus had secured orders for 133 passenger jets valued at around $13 billion, while Boeing netted 103 orders to the approximate value of $10 billion. Smaller aircraft manufacturers, such as Bombardier and Embraer also reaped handsome benefits from exhibiting at the Farnborough International Airshow.
Reportedly deals sealed by Russian companies reached around $10 billion, with the largest deal being between Russian aircraft manufacturer Irkut Corporation and Crecom Burj Resources, a Malaysian transportation holding company, for the supply of fifty new MS-21 passenger airliners, with delivery starting in 2016.
Not to be forgotten is the boost that all these orders will give to related aviation supply and component industries. While some deals were signed and sealed, others may at this stage only be tentative commitments, nevertheless the Farnborough International Airshow turned out to be a lot more successful than anticipated, and investors may do well to note who the main wheeler-dealers were if they plan on investing in the aviation sector of the market.
