Farnborough Air Show flies into oil-price storm

London: The extent to which record-high oil prices are affecting commercial aviation will fly into focus this week when key players from the sector descend on the Farnborough International Air Show near London.
The biennial event opens on Monday and is seen as a traditional battle ground between European planemaker Airbus and US rival Boeing.
Oil-producing Gulf states are set to make large orders for commercial planes at the week-long event thanks to mountains of fresh cash they are earning from soaring crude prices, which Friday struck record heights above 147 dollars a barrel.
Etihad Airways, the national carrier of the United Arab Emirates, has said it is likely to announce bumper orders of between 50 and 100 aircraft at Farnborough.
However public airlines in countries suffering from inflation, the credit crunch as well as slowing and negative economic growth, may find it difficult to afford big deals, according to some analysts.
"In term of orders, Farnborough is likely to be much more low-key" than in 2006, said Rupinder Vig, analyst at Morgan Stanley.
Aircraft makers argue that record crude prices could in fact be a driver for airlines to fast-track investment in more fuel-efficient planes, such as the Airbus A380 and A350, as well as Boeing's Dreamliner.
"We see a bigger demand for replacing older, less efficient aircraft," Randy Tinseth, Boeing's vice president of marketing, said on Wednesday as the US planemaker published its 20-year outlook on commercial aviation.
Kerosene, the fuel used to power planes, is distilled from crude oil.
13/07/08 AFP

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Categories: Farnborough Air Show 2008