Who Cares About the Paris Air Show?

When you think of air shows, you probably think of a warm summer day, some cool flying demonstrations to show off military might, and a few static displays of airplanes to walk through. That’s the core of any air show, but for the premier airshows in the world, that’s more of a side distraction than anything else. This week is the biennial Paris Air Show, and what you see happening in the air and on the ground is just fluff. This show is all about doing deals behind the scenes.

Air Show Aircraft Sales

Paris and Farnborough (in the UK) take turns being the premier air show every other year. This year, it’s Paris. There are definitely some very cool flying demos, including the A380 (despite yet another wingtip mishap that almost scrubbed the flight) and a bunch of military flights as well. Why do they bother? They’re trying to get sales. Some airlines, aircraft manufacturers, and suppliers like to hold out to make a big splash at an air show with a big order.

This has never made sense to me. If I were ordering some airplanes, I’d rather tell the manufacturer to save all that wasted money thrown into air show displays and pass the savings along to me. But that’s not how it works. Instead, everyone goes and hangs out in the individual company “chalets” and has a grand old time. During leaner years, the smiles are few and far between, but so far we’re off to a hot start in Paris with almost 300 aircraft orders on the first day alone.

Take a look at some of the aircraft orders that have been announced so far. These are just aircraft orders. There are plenty of other deals with suppliers for a variety of other things as well.

  • Air Lease, the new big aircraft lessor started by former ILFC chief Steven Udvar-Hazy signed up for 50 of the next generation Airbus A320neos with options for 11 more down the road. The company also ordered 20 Boeing 737-800s with 4 options, 11 Airbus A330s, 5 Boeing 777-300ERs, 5 Embraer 190s, 4 Boeing 787-9s, 1 lonely Airbus A321, and a partridge in a pear tree. All of these will be leased out to different airlines.
  • Aircraft lessor GECAS ordered 60 of the Airbus A320neos. It also picked up 15 ATR 72 turboprops with 15 options along with 2 Embraer 190s. Rumor has it we can expect 2 Boeing 747-8 freighters to be ordered today. As with Air Lease, these will all be leased out.
  • SAS out of Scandinavia ordered 30 of the Airbus A320neos and kept 11 options. SAS has struggled a lot lately, so hopefully they’re still around when it comes time to take delivery. These will replace the older MD-80s.
  • Sriwijaya Air (say that three times fast) ordered 20 Embraer 190s to fly around Indonesia along with another 10 purchase rights. What’s the difference between a purchase right and an option? I have no clue.
  • Kenya Airways ordered 10 Embraer 190s with options for 10 more.
  • Bombardier picked up an order for 10 of its new C-Series airplanes with 6 options from a mystery buyer. This will be a launch customer. So who is it? We don’t know, but we do know that Bombardier says it’s a “major network carrier.” I’m eagerly awaiting news of who that might be, but I can’t imagine it’s a US-based airline.
  • Boeing received one order for 15 of its 747-8s and another for two of the big birds. Who ordered them? It’s a secret. Again. While it wouldn’t surprise me if the two were for private owners, those 15 have to be for a major airline.
  • Qatar Airways picked up 6 777-300ERs. It loves making noise at air shows.
  • Saudi Arabian beefed up its A330 orderbook with four more.
  • Almost lost in the shuffle, Air Astana out of Kazakhstan ordered 2 Embraer 190s with 2 options.

If you’re at Paris this week, enjoy all that drinking and schmoozing. If you’re here at home and you’re interested in this kind of stuff, I would recommend following Flightglobal. Those guys have put together some great coverage on what really is a pretty mundane subject for anyone outside the industry.

[Original photo via Flickr user slasher-fun/CC 2.0]

20 Responses to Who Cares About the Paris Air Show?

  1. Sanjeev M says:

    Apparently word this morning is that the CSeries order is from Korean Air.

    I also don’t understand the difference between options and purchase rights (maybe purchase rights guarantees certain delivery slots)

  2. Could UA buy some single aisle this week for long term replacements of the 737 757 and A320 Fleets? Also could have they bought the 17 747-8I odds are no but who knows.

    • I wonder if they’re really ready to start looking at the fleet like that. They’ve barely started integrating their networks..

    • CF says:

      I agree with Nicholas. I imagine we’re too early for that right now. Besides, United is most likely going to be interested in seeing what Boeing does to counter the A320neo, I would think. Remember, this is Boeing-loyal Continental running the show.

  3. Jason H says:

    Cranky – I think of the Paris and Farnborough airshows as the industry convention for aircraft manufacturers. Just like when the company I work for spends a wad of cash on the NAB show in Vegas. It doesn’t make a lot of sense, but you still do it.

  4. I thought Airbus was doing a good job of how to badly represent themselves at the show. Have your ‘A’ list number one airplane hit a building and loose part of a wing, and pull a military jet because of mechanical issue so I read.

    I wonder how much of a savings buyers get for waiting until these big air shows to announce an order.

  5. nimitz says:

    excellent lucy booth.

  6. Xnuiem says:

    NBAA is the exact same way, only for business aviation. Why Flexjet or NetJets likes to wait for NBAA each year, or all the little companies (like Harpo), is beyond me.

    My guess, as a previous attendee year after year, is that it is a great excuse to travel, party, drink, and dine, all on the expense account.

  7. Mark says:

    A comment on pprune suggests that Sanjeev has it backwards:

    “A purchase right is an agreement which gives you the right to purchase an aeroplane at an agreed price (subject to escalations) but doesnt typically have a delivery position attached to it.”

    (http://www.pprune.org/archive/index.php/t-330521.html)

    So: an option is a slot on the delivery schedule with an option to refuse. A right is merely a price commitment.

  8. Good day for this blog as the 787 arrived in Paris for the show and in a press release tomorrow morning All Nippon who is the launch customer for the 787 will make a special announcement.

    It’s like Hollywood was hired to put on a Las Vegas style show or a reality show…lol

  9. And thanks for not going on and on about how many orders Airbus has announced versus Boeing. I don’t understand why your counterparts on other blogs, newsletters, and news sites think the competition betwen Boeing and Airbus is of any interest to anyone. Who really cares who “wins” a race that no one is betting on.

    • Joe says:

      Well, people are betting on it. Investors care that Boeing is getting as much business as possible so they get a good return on their investment. As do workers, suppliers, and businesses that depend on Boeing.

      • All of those stakeholders should care if Boeing is selling the jets at a profit. GM got into stuck in the problem that they wanted market share, and they gave up on looking for profitability.

        I’d rather have Boeing have 25% of the market and be profitable, than have 80% of the market because they undercut too much and be selling at a lost..

      • No argument, Joe. But put that in investor materials. There is no need to keep inundating the travelling public, the vast majority of whom don’t own shares, with the inane mine-is-bigger-than-yours schtuff

  10. Zack Rules says:

    Perhaps someone forgot to invite the Cranky Flier…

    How about a post about Spirit Airlines? Their recent new route announcements are well, meandering? Throwing darts at a wall?

  11. The A320 NEO is taking the orders this time around but the B737 is not, usually this is a neck and neck race of stick your head out of the tent “I just sold another 20!”, till the other screams “I’ve sold more than you at 30 + options”, so is Boeing’s indecision on the replacement now causing buyers to back the updated Airbus, unless Boeing have something up their sleeve and a launch order to match (UA), I do feel the American Carriers are losing out by not buying a few A380’s, the Asian Airlines are going to clean up on the Pacific routes if they don’t in the next decade.

  12. Jiim says:

    I believe an option is for a particular slot (i.e., whenever the plane is ready, the airline can exercise its option to buy or let it go to the next airline on the list) and a purchase right is the right to buy it during a particular period of time… or something like that.

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