Sliding airline profits and plane delays cast shadows at air show
Adds Air Canada profit downgrade in paragraph 13, updates shares in 14, adds VietJet deal in 21
Ryanair warns ticket prices falling as travel boom fades
Boeing gets order boost for 777X from Korean Air
UK PM stresses importance of fighter jets amid defence review
By Joanna Plucinska and Allison Lampert
FARNBOROUGH, England, July 22 (Reuters) -A plunge in Ryanair's RYA.I quarterly profits cast a shadow over the opening of the Farnborough Airshow on Monday, where aviation leaders were already fretting about supply chain snags, aircraft delays and floundering plans to cut emissions.
Boeing BA.N announced a bumper order from Korean Air 003490.KS for 20 777X jets and 20 787s, worth $7 billion according to estimated delivery prices from Cirium Ascend, in a boost for the U.S. planemaker's long-delayed 777X programme.
But many delegates at the July 22-26 gathering of aviation leaders were not expecting the traditional deluge of deals as Airbus AIR.PA struggles to reach output goals and Boeing adopts a low-key posture amid its safety crisis, which was triggered by a panel flying off a 737 MAX jet in January.
Aviation was hit hard by the pandemic which saw air travel collapse only to bounce back sharply. That left many firms scrambling to resolve labour and parts shortages.
The situation has been exacerbated by a spiralling crisis at Boeing, which has had to slow production of its best-selling 737 MAX plane following the panel blowout.
Delays in delivering planes have hampered airlines' efforts to capitalise on the post-pandemic surge in travel and inflated costs, and signs are growing that they are struggling to pass those costs on to consumers as demand starts to normalise.
Ryanair, Europe's biggest budget airline, reported on Monday an almost halving in quarterly profit, with fares plunging 15% and management warning of more pressure to come on prices.
CEO Michael O'Leary added there had been some improvement on deliveries from Boeing, but that there were still delays and he was getting a little concerned about deliveries due next year.
Separately, flydubai said its fleet expansion plans had been hit by delays in Boeing deliveries, while the boss of Air India said it was having to rob parts from some of its other aircraft to keep planes flying amid industry supply chain snags.
"The big question for the airlines here at Farnborough is what has happened to the halo effect of demand after the pandemic - has that recovery stalled?" said veteran aviation journalist Mark Pilling, who was due to host a panel of CEOs.
Pegasus Airlines PGSUS.IS CEO Guliz Ozturk told reporters that customers were going "back to basics" seeking lower fares.
"We have started seeing the normalisation of demand. What does it mean? I mean, the demand is there, but now the travellers are looking for, as before the pandemic, for the most affordable, the lowest, the best price for their travel."
Hot on the heels of Ryanair's warning, Air Canada AC.TO cut its full-year core profit forecast, blaming over-capacity in some markets and weaker pricing power on international routes.
Its shares fell nearly 4% in early trading. Airline stocks were among the biggest fallers in Europe .STOXX, with Ryanair down 16% at 1600 GMT, easyJet EZJ.L down 7.5%, TUI TUI1n.DE off 4.6% and BA-owner IAG ICAG.L 3.5% lower.
However, Boeing's vice president of commercial marketing, Darren Hulst, said there was no sign of a weakening in demand for planes and suggested the warnings from airlines were just a sign of a "little bit more reality in the marketplace".
FIXING SUPPLY CHAINS
With dealmaking expected to be limited, the focus at the air show is likely to fall on how manufacturers are tackling supply chain blockages.
Asked about flydubai's complaints, Hulst conceded that Boeing had "disappointed our customers ... over and over again, in many cases," but that the work the company was doing this year was focused on ensuring that wouldn't happen again.
Airbus CEO Guillaume Faury also said on Sunday that the European planemaker was making progress ramping up production of its top passenger jets.
Some deals will get over the line, delegates said.
Japan Airlines 9201.T said it had ordered 10 Boeing 787-9s and agreed options for 10 more, while Vietnamese budget carrier VietJet VJC.HM firmed up a deal for 20 Airbus A330neos.
Industry sources said Virgin Atlantic was close to placing a top-up order for Airbus A330neos and Saudi low-cost carrier Flynas was poised to order up to 30 of the same widebody aircraft. The companies declined to comment.
Turkish Airlines THYAO.IS, however, said engine talks were still holding up a potential big order with Boeing.
This week’s air show will be peppered with sustainability panels and workshops as aerospace giants and airlines seek to emphasise their commitment to reducing carbon emissions, even as they plan to massively expand global air travel.
On the defence side, the focus will be on Ukraine, possible delays to America's future F-22 fighter replacement, code-named NGAD, and a defence review by Britain's new Labour government.
At the show, British Prime Minister Keir Starmer stressed the importance of the UK's fighter jet capability, but stopped short of guaranteeing its next generation combat air programme with Japan and Italy would not be affected by the review.
Additional reporting by Joe Brock, Tim Hepher and David Shepardson; Editing by Mark Potter and Josephine Mason
Activos relacionados
Últimas noticias
Descargo de responsabilidades: Cada una de las entidades de XM Group proporciona un servicio de solo ejecución y acceso a nuestra plataforma de trading online, permitiendo a una persona ver o usar el contenido disponible en o a través del sitio web, sin intención de cambiarlo ni ampliarlo. Dicho acceso y uso están sujetos en todo momento a: (i) Términos y Condiciones; (ii) Advertencias de riesgo; y (iii) Descargo completo de responsabilidades. Por lo tanto, dicho contenido se proporciona exclusivamente como información general. En particular, por favor tenga en cuenta que, los contenidos de nuestra plataforma de trading online no son ni solicitud ni una oferta para entrar a realizar transacciones en los mercados financieros. Operar en cualquier mercado financiero implica un nivel de riesgo significativo para su capital.
Todo el material publicado en nuestra plataforma de trading online tiene únicamente fines educativos/informativos y no contiene –y no debe considerarse que contenga– asesoramiento ni recomendaciones financieras, tributarias o de inversión, ni un registro de nuestros precios de trading, ni una oferta ni solicitud de transacción con instrumentos financieros ni promociones financieras no solicitadas.
Cualquier contenido de terceros, así como el contenido preparado por XM, como por ejemplo opiniones, noticias, investigaciones, análisis, precios, otras informaciones o enlaces a sitios de terceros que figuran en este sitio web se proporcionan “tal cual”, como comentarios generales del mercado y no constituyen un asesoramiento en materia de inversión. En la medida en que cualquier contenido se interprete como investigación de inversión, usted debe tener en cuenta y aceptar que dicho contenido no fue concebido ni elaborado de acuerdo con los requisitos legales diseñados para promover la independencia en materia de investigación de inversiones y, por tanto, se considera como una comunicación comercial en virtud de las leyes y regulaciones pertinentes. Por favor, asegúrese de haber leído y comprendido nuestro Aviso sobre investigación de inversión no independiente y advertencia de riesgo en relación con la información anterior, al que se puede acceder aquí.