The residents of Farnborough, Hampshire, are constantly disturbed by flights to and from the UK’s busiest airport for private jets. But for one week in July every two years, the whine of commercial aircraft is replaced by the bone-juddering roar of fighter planes.
The occasion is the Farnborough international airshow, a gathering of top executives from airlines, aircraft makers and arms manufacturers hoping to sell their wares and press flesh.
Two years ago, the aerospace and defence industry was starting to emerge from the turmoil of the pandemic. For many of the attendees this week, the question will be less about whether there is demand for their products and more about whether they are able to make them fast enough.
“The supply chain was supposed to be acute in 2022 and better by now,” says Nick Cunningham, an aerospace and defence equity analyst at Agency Partners. But that has not panned out as expected.
The International Civil Aviation Organization forecasts that global air travel could triple by 2050. Without technological improvements, that would mean carbon dioxide emissions rising from about 500m tonnes to more than 1.5bn tonnes.
The question of how to eliminate those carbon emissions is always the shadow hanging over airshows (particularly in 2022 during a record English heatwave), but that has not stopped Europe’s Airbus and America’s Boeing from racing to pile up orders from airlines.
Airbus had a backlog of 8,626 orders to get through at the end of last year, but Boeing has only 5,600. That reflects the latter’s lurch from crisis to crisis since two crashes of its bestselling 737 Max in 2018 and 2019 killed 346 people. Boeing’s latest disaster – thankfully with no loss of life – was a door panel blowing out during an Alaska Airlines flight in January. The US plane maker this month pleaded guilty to criminal charges of violating a plea deal related to the 737 Max crashes. A strong airshow order book may help the company restart its turnaround efforts again.
The crisis has made Airbus the clear industry leader and at the show it will fly an A321XLR. The demand for the passenger jet’s “extra long range” has put immense pressure on Boeing to respond. Yet Airbus is struggling to press home its advantage. The new variant was delayed by a year and last month the company cut its forecast for the number of planes it will make this year from 800 to 770, as it struggles to source engines, seats and parts for aircraft cabins.
Robert Stallard, an analyst at Vertical Research Partners, says “supply chain and other issues have continued to hold up new aircraft deliveries and cloud the outlook”. The “narrative of gradual improvement” , he adds, has been replaced by doubts over the ability to accelerate manufacturing.
On the defence side, Farnborough is a handy shop window for companies hoping to sell to the UK government. The town itself – part of the constituency of Aldershot – is evidence of the change on that front: the home of a large British army garrison was Conservative for more than a century, before turning Labour at the general election.
Francis Tusa, editor of the Defence Analysis newsletter, says then Tory prime minister David Cameron was “mobbed” when he opened the show in 2012, as bosses tried to work out the government’s thinking.
He said it is likely to be a similar situation for Labour’s new defence ministers, among them John Healey, Vernon Coaker and Maria Eagle, who are expected to attend – possibly alongside Keir Starmer.
Executives will want to know if the newly announced strategic defence review will mean a delay to orders in the pipeline.
The grim increase in wars in recent years has been a bonanza for arms manufacturers. The market values of UK weapons companies Babcock, BAE Systems and Rolls-Royce are up by 60%, 64% and nearly 400% respectively since the last Farnborough airshow. The global aerospace and defence industry made record revenues of $829bn in 2023 as the conflicts in Ukraine and Gaza helped to increase military budgets.
Cunningham says government weapons plans suggest an “upturn on the scale and duration of the prewar rearmament” before the second world war.
Yet for all the defence industry demand, manufacturers may have to answer some of the same pointed questions about whether they are ready.
After the pandemic, “defence didn’t suffer that extreme initial impact of the supply chain that we saw in civil,” says Cunningham. But there are signs it may be coming, he adds: “We’ve just not seen any of it yet.”
