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  • Writer's pictureGary Crichlow

AV Analysis Week 26: Paris Airshow Order Summary

Updated: Jun 30, 2023

A regular update where our in house team of aviation experts and ISTAT certified appraisers use our data to analyse values, market movements and notable aviation news.


This week Gary Crichlow analyses passenger Narrowbody and Widebody orders at the 2023 Paris Air Show.


Paris 2023 Order Tallies

Over 1,200 Aircraft, Worth USD 77 billion

Over the Paris Air Show’s duration, AviationValues tracked formal announcements amounting to 1,213 new commercial passenger Narrowbody (defined as single aisle aircraft in the Embraer E190 and Airbus A220 size category and larger) and Widebody (dual aisle) aircraft. The value of these orders, based on Market Values as of 25 June 2023 for zero age aircraft, is calculated to be c. USD 77 bn. Orders include firm orders and options as well as previously announced Memoranda of Understanding that were finalized at the show.


It is important to note that the actual order price paid is a matter of confidential negotiations between each orderer and the respective manufacturer. The final delivery price will also be subject to negotiated price escalation charges between the date of the order and the actual delivery.


Orders of commercial passenger Narrowbody and Widebody aircraft announced and/or finalized at the Paris Air Show 2023 by Original Equipment Manufacturer (OEM)


The headline orders were placed by Indian carriers: Air India finalised an order for 540 aircraft with a value of c. USD 37 bn, split between Boeing and Airbus. IndiGo Airlines announced an order for 500 Airbus A320neo family narrowbodies worth c. USD 28 bn; and Akasa Air ordered an additional four Boeing 737 MAX aircraft worth c. USD 0.2 bn.


Three major lessors also added to their orderbooks, with Avolon placing an order for 40 Boeing 737 MAX (c. USD 2 bn), Azorra ordering 5 Embraer E190 E2s (c. USD 0.2 bn), and Air Lease Corporation adding two more Boeing 787 aircraft (c. USD 0.3 bn).


Passenger Narrowbody Orders

Orders of commercial passenger Narrowbody aircraft announced and/or finalized at the Paris Air Show 2023 by orderer


* Market Value based on zero age delivery value as of 25 June 2023. Actual future final delivery price is subject to individual negotiation between the manufacturer and the orderer regarding specific price concessions and escalation.


Passenger Widebody Orders

Orders of commercial passenger Widebody aircraft announced and/or finalized at the Paris Air Show 2023 by orderer


* Market Value based on zero age delivery value as of 25 June 2023. Actual future final delivery price is subject to individual negotiation between the manufacturer and the orderer regarding specific price concessions and escalation.


Paris vs Farnborough: Air Show Announcement Trend

The 2023 Paris Air Show tally of 1,213 passenger Narrow and Widebody commercial aircraft order announcements nearly doubled the 2019 Paris Air Show total of 627. By Market Value, the USD 77 bn 2023 volume exceeded 2019 by more than 125%, driven by a surge in Widebody aircraft orders from 51 (2019) to 132 (2023).


The 2023 order by units was nearly quadruple the 313 orders announced at the 2022 Farnborough Air Show, which alternates biannually with Paris. With no Widebody orders announced at Farnborough last year, Market Values were a fifth of Paris 2023’s total.


The 2023 order total is clearly driven by the fleet renewal and growth plans of two operators from the same country: Air India and IndiGo Airlines. Together they accounted for 86% of the 2023 order announcements. By comparison, the two largest orders at Farnborough 2022 accounted for 60% of the 2022 tally and included one global lessor. At Paris 2019 the two largest orders accounted for 58%, also including one global lessor. Geographic concentration is a key risk consideration when it comes to financing deliveries, and it remains to be seen how this will play out when they come due.

Orders of commercial passenger Narrowbody and Widebody aircraft announced and/or finalized at the Paris Air Show 2019 (PAS 2019), Farnborough Air Show 2022 (FAS 2022), and Paris Air Show 2023 (PAS 2023)


* Market Value based on zero age delivery value as of 25 June 2023 for PAS 2023, 22 July 2022 for FAS 2022, and 23 June 2019 for PAS 2019. Actual future final delivery price is subject to individual negotiation between the manufacturer and the orderer with regard to specific price concessions and price escalation.


In 2019, orders finalized in Paris accounted for 28% of the total 2,266 orders that year. In 2022, orders totaled 2,905; a relatively small proportion of these were announced at Farnborough.

Orders of commercial passenger Narrowbody and Widebody aircraft announced and/or finalised at PAS 2019, FAS 2022 and PAS 2023 compared to total annual orders


Conclusion

Paris Air Show 2023 was, from an ordering standpoint, a commercial success for aircraft manufacturers and their supply chains. The pressure is now on to transform those orders into deliveries to meet demand.


It remains to be seen whether the pace of order growth will continue against the economic headwinds that could dampen demand for travel, as well as the highly publicised challenges posed by manufacturer supply chain constraints and engine reliability issues.


Furthermore, financing costs have increased sharply in the past 12 months. It is not yet clear how long this will persist and what type of financing environment will prevail when these newly ordered aircraft become due for delivery. The geographic concentration of these deliveries, with 86% directly placed by carriers based in a single jurisdiction, is also significantly higher than both the preceding Paris and Farnborough shows. This will be taken into consideration by the investors who will finance the aircraft.


With this level of uncertainty, AviationValues’ daily updated value and fleet analytics provides users with a key advantage: the availability of the most up to date historical and forecast value and fleet information whenever they need it.


Data as of June 2023


Disclaimer: The purpose of this blog is to provide general information and not to provide advice or guidance in relation to particular circumstances. Readers should not make decisions in reliance on any statement or opinion contained in this blog.


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