Planemakers Promote Efficiency Over Dazzle at Paris Air Show

There’s a Drive to Efficiency: Seymour on Paris Air Show

Paris Air Show attendees may get out their calculators instead of binoculars next week as Airbus Group SE and Boeing Co. tout an efficiency drive that aims to reap billions spent on planes in the last decade.

To help airlines squeeze the maximum revenue from their planes, Boeing and Airbus are poring over small details. That means shaving weight from galleys, stealing inches from toilets to squeeze in a few more revenue-generating seats or adding an extra fuel tank to increase an aircraft’s range.

“The new products and models have been announced,” said Howard Rubel, a New York-based analyst with Jefferies Group LLC. “It is now about delivering the goods and addressing the incremental needs of the air carriers.”

The show rings in a new era for the planemakers, which are sitting on an 14,380-plane order backlog, according to Bloomberg Intelligence data. Having spent billions on aircraft from the Boeing 787 Dreamliner to the Airbus A350 and A380 that were the stars at recent expos, the focus has shifted to optimising those platforms by adding a few extra seats here or giving a plane more range with an extra fuel tank there.

Neither of the two big aircraft makers is bringing a brand-new aircraft to Le Bourget, aerospace’s largest and oldest trade event, breaking a four-year streak of debuts and show-stoppers. Orders are predicted to fall well short of the $120-billion haul of last year’s Farnborough expo in southern England, which alternates with the Paris fair.

Display Bonanza

“We cannot launch new developments every year, this is extremely costly, extremely risky, and extremely long,” Airbus Chief Executive Officer Fabrice Bregier said in an interview. “The strategy for the next years is to inject innovation faster. Not brand new programs, but big evolutions.”

With Bombardier Inc.’s CSeries the only new airliner making its European debut, talk this year will probably focus on profitability and production rather than glittery new models.

Airbus likes to make a splash at air shows, though perhaps with not the same pizazz this year as the unscheduled fly-over by its $11-billion A350 wide-body at the last Paris show in 2013. Goldman Sachs Group Inc. analysts say expectations for the European planemaker are “modest,” with no new major new platform announcements.

Reaping Gains

For the Toulouse, France-based company, the show is also an opportunity to reassure prospective customers. The A400M military airlifter, which suffered a deadly crash in March, will perform in the flying display. Any hope for a surprise appearance of the first A320neo with Pratt & Whitney’s new engines was quashed after technical issues interrupted the test-flight schedule back in Toulouse.

Qatar Airways Ltd. plans a display blitz of its fleet at the show, with an unprecedented five aircraft on site, from the new A350 to the A380 double-decker to a smaller Airbus and two Boeing jets.

Adding seats is one of the easiest ways to improve the operating economics, since costs are typically measured on a per-traveler basis. Airbus is working on a design to fit add 2 1/2 additional seat rows to its narrow-body A320, allowing for as many as 195 seats, by making evacuation slides wider.

Boeing has found a way to squeeze as many as 14 extra seats into the rear of its largest twin-engine plane, the 777-300ER, where the aircraft’s frame narrows. To do so, the Chicago-based planemaker is shrinking lavatories and borrowing a seating plan developed for the 787 Dreamliner, according to Elizabeth Lund, vice president and general manager for the 777 program.

Ryanair Group Plc Chief Executive Officer Michael O’Leary, who is buying as many as 200 Boeing 737 MAX 8s with eight additional seats, says the extra capacity means the seats “nearly paid for the plane” over its life-cycle.

“It’s not just a trim of costs, it’s a very significant step jump in revenues and step down in costs,” O’Leary said.

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