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Richard Aboulafia: 'We'll see strong orders and airline optimism'

Richard Aboulafia: 'We'll see strong orders and airline optimism'
By Euronews
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The 49th Paris Air Show, possibly the largest aviation event of 2011 was held at Le Bourget, France.

Some of the world’s most advanced commercial and military aircraft were on display and there were daily flight demonstrations of aircraft from around the world.

To get his view on the show before it started, euronews spoke to Richard Aboulafia, Vice-President of Analysis at the research organisation Teal Group Corporation.

euronews: ‘‘The Paris Air Show is one of the most important events for commercial and industrial deals and announcements in Aviation. What should we expect this year?’‘

Richard Aboulafia: ‘‘We’ll see strong orders, technical progress in key programmes, and airline optimism. In short, the industry will continue to be largely de-linked from global economic trends.’‘

euronews: ‘‘The main airframers are increasing the output of their aircraft; at the same time, IATA has forecast a breakdown in airlines’ profits. What is the outlook for the air transport industry?’‘

Richard Aboulafia: ‘‘Right now, we’ve got a very positive combination of decent air travel numbers, oil prices that are high enough to encourage airlines to use new equipment – but not high enough to cause ruinous airline losses – and lots of government and private sector cash pouring into the business. We provide attractive investment opportunities in the airline and aircraft sectors. But those air travel numbers are starting to weaken. If they start to follow the sluggish economic indicators in the US and Europe, we could be faced with jetliner overcapacity.’‘

euronews: ‘‘Airbus has chosen to update its single-aisle model, with the A320neo, waiting for more technological advances to launch an all-new aircraft. Everybody looks at Boeing to know what it will do. What’s your feeling about this?’‘

Richard Aboulafia: ‘‘Airbus did the right thing. Engines are really the only new technology that enables new narrow body products in the next five to 10 years, and airlines are eager to get them. I strongly suspect Boeing will need to match them with a re-engined 737. Boeing should accelerate this programme. The only thing worse than doing a ‘me-too’ plane is being clearly forced to do one after a few high profile market losses.’‘

euronews: ‘‘Throughout the world, airline passengers have had more and more opportunities in recent years to fly at an affordable cost. Do you think that this trend will continue?’‘

Richard Aboulafia: ‘‘Unfortunately, the tremendous air travel market stimulant from low cost carriers (and from legacy carriers being forced to match them) is a one-time event. It’s already happened in the US and Europe. The good news is that it’s still happening in Asia. We’ve got another five to 10 years of strong growth in Asia as more people get access to discounted air fares. But after that one-off effect, air travel will go back to being closely linked with economic growth.’‘