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Every odd-numbered year, Le Bourget Airport plays host to the , one of the most prominent events in the global aerospace calendar, and a chance for the whole aerospace industry to assemble.

Having skipped 2021 in a Covid-19 enforced hiatus, the show returns for its 54th edition, bringing the unique opportunity for industry leaders to collaborate, trade knowledge, showcase new innovations and technologies, and actively do business. Facilitating important networking, business negotiation, and a space in which to address industry challenges, the exhibition has a pivotal impact on the year ahead. Essentially, it acts as a barometer for the sector’s health, shaping market sentiment.

The full picture of the sector will be clearer following the air show, with orders often signed and announced at the event. However, it’s reasonable to assume that, following several years of industry turmoil, this year’s attendees can anticipate a brighter outlook. 

Covid-19 kept planes grounded

Recent years have been unkind, and the aerospace industry has been forced to navigate a series of turbulent events, with the Covid-19 pandemic delivering a particularly devastating blow.

As international travel ground to a halt for long but undefined periods of time, airlines faced unprecedented financial strain and the demand for commercial aircraft declined sharply, with cancellations for existing orders coming fast. The resulting production cuts, delayed deliveries, and workforce reductions sent shockwaves throughout the entire supply chain, leaving some manufacturers, suppliers, and service providers scrambling to survive.

This combined with economic downturns and geopolitical tensions fostered uncertainty and volatility in the sector, with each complex hurdle testing its resilience and adaptability.

But they’re now flying off the tarmac

Of course, outcomes for manufacturers in the civil aerospace sector largely follow predicted travel trends. And today, with Covid-19 restrictions lifted in most countries, and the market having regained confidence, travel is firmly back on the agenda for many.

With airlines using the pandemic to clear out fleets of older or less efficient planes, and the industry changing its focus to more efficient and greener options, new planes are taking to the skies. ADS Commercial Aircraft & Engine Data for 2023 shows that deliveries of aircraft year to date by April 2023 totalled 337 – a considerable leap from 2020 and 2021, and only a fraction behind 2022’s bumper year. 

Though the data shows orders are much lower this April than last, wider announcements and sector comments since then point to a further post-pandemic acceleration in orders around this years’ show.

What’s incredibly positive for the industry is the backlog of orders, which at the end of April stood at 13,401 aircraft – worth around £200bn to the UK over many years. That only looks set to grow further over the next week. 

There are so few sectors that can boast such a pipeline this far in advance. This is a very healthy amount of work for businesses in the supply chain to get through and, notwithstanding potential order cancellations, a strong position for the industry to be in. However, companies will need to gear up swiftly to deliver or risk order cancellations if other players are able to scale more quickly, or the current demand eases before orders can be delivered.

While the companies that survived the pandemic were those able to flex and downscale quickly, thriving in the next few years will rely on the ability to flex and upscale rapidly. 

Smaller aircraft in demand as travellers opt for short-haul travel

Though holidays and (to a lesser extent) business travel are back in vogue, travel habits have not simply reverted to their pre-pandemic norm. Most long-haul travel was paused during the pandemic. And in the years following, more passengers have opted for short-haul travel – possibly to minimise financial loss in the event of cancellation, or simply due to flight costs being up during the current cost-of-living challenges. Passenger numbers are also only recently coming close to pre-pandemic levels, though IATA predicts they will meet them in .

Airlines initially followed the trend of refreshing short-haul fleets while keeping remaining wide-body fleets partially mothballed. This is evidenced in the 2023 ADS Commercial Aircraft & Engine Data, which showed that, of the 337 deliveries year to date by April 2023, 88% were single-aisle aircrafts, while just 12% were wide body. 

Of course, with the exceptionally long lead times on aircraft, these delivery figures reflect decisions made two years ago or more, coinciding with the beginning of the end of national lockdowns. 

What’s interesting, however, is that gross orders of wide-body planes are up by 200%, indicating that airlines have confidence in passenger appetite for long-haul trips in the next few years. On this trend, British Airways also recently announced that four will re-join its fleet, as it launches its biggest schedule since March 2020. 

Despite positivity up and down the aerospace supply chain, businesses will be keeping a close eye on the economic outlook and consumer spending, in the hope that recessionary pressures do not result in a marked decrease in international travel over the next 12 months. 

While a recession would of course not be positive, data gathered from our recent consumer markets outlook showed that, following long lockdowns, travel is one of the last categories of discretionary spend that respondents would look to cut back on. While 40% planned to spend less on eating or drinking out, only 10% intended to reduce spend on long stay holidays, and 14% on weekends away. This is indicative of the appetite for international travel and the willingness to prioritise it ahead of other discretionary spend, which is encouraging for the sector. 

Zero-emission commercial flights coming soon

Meanwhile, spurred on by the announcement of a £113m investment through the Aerospace Technology Institute (ATI) Programme, announced by the Business and Transport Secretaries in February, aircraft developers are firmly focused on innovation, taking leaps towards zero-emission goals. In January of this year, flew the largest aircraft in the world (19 seats) to be powered by a hydrogen-electric engine. 

Zero-emission commercial flying would be a game-changer for the aerospace industry, and advancements like ZeroAvia’s, as well as recent steps forward with its UltraFan cutting-edge jet engine technology, show that the industry is moving in the right direction. But is it going fast enough? 

Environmental pressures are not going away, and consumers more and more expect and consider greener options. Primes in the sector are also increasingly expecting their suppliers to communicate action plans and progress through transparent reporting on emissions, resource consumption, environmental impact, waste and recycling (driven by increasing analysis and disclosure requirements in part by financial regulators and investors). All of this was discussed at a recent industry event run in partnership between ADS Group, Rolls Royce and RSM. 

It will be interesting to see the split of aircraft orders announced at the air show. Presumably, this will continue to follow the focus on the most fuel-efficient long-haul aircraft options. But perhaps more intriguing will be how much more we see of the emerging clean technology options.

Call for renewed industrial strategy

Sadly, it’s not all rosy, with one key risk for the aerospace industry being regulatory alignment following the Brexit agreements made in December 2020, and the UK’s consequential leaving of the European Aviation Safety Agency (ESAE). 

As a result, UK aviation licenses are no longer recognised in the EU. European maintenance firms also require a separate approval to work for UK-registered airlines. ADS Group has raised concerns around these new rules – saying that failure to secure membership to the ESAE as part of Brexit negotiations has hampered aviation’s recovery following the pandemic. In addition, the UK is also yet to reach an agreement allowing its scientists to re-join Horizon Europe, the €95bn research and innovation programme. Given the pace of change currently taking place within the industry, it is even more important that the UK works closely with the EU. Meanwhile, Make UK, has called for the development of a long-term modern industrial strategy that takes into consideration not only the need to accelerate the transition to net zero and other technological changes, but also a plan that considers the skills, infrastructure, finance and innovative business environment the UK requires. Without this strategy, British businesses risk losing out to other companies around the world. 

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