Paris airshow set for new jet orders despite conflict, tariff gloom
PARIS (Reuters) -Aerospace manufacturers will aim to project business as usual with big-ticket aircraft orders at next week’s Paris Airshow, despite U.S. tariffs, escalating conflicts and fragile supply chains rattling the global aviation and defence industries.
The world’s largest aviation trade show, running from June 16 to 20 in Le Bourget, gives aircraft and arms manufacturers a key stage to showcase cutting-edge technologies such as AI and autonomy, while making headline-grabbing order announcements.
Airbus may kick off the event with two key Saudi orders on Monday, illustrating strong air travel growth in the Gulf, while facing last-minute competition from Brazil’s Embraer for a potential order for some 100 small A220 jets from AirAsia.
Boeing (NYSE:BA) is expected to secure the bulk of a fleet shake-up by long-time customer Royal Air Maroc but is heading for a quieter week than its rival after pre-empting the show with big orders during U.S. President Donald Trump’s recent visit to the Gulf.
Behind the scenes, civil planemakers, as well as defence and supply-chain giants such as Lockheed Martin (NYSE:LMT) and Raytheon (NYSE:RTN), will be grappling with the uncertain repercussions of Trump’s volatile tariff announcements and simmering conflicts.
"We were just getting our heads out of the water (post-COVID) and some of our tier-2 and tier-3 suppliers were just beginning to breathe again, and now this uncertainty," the CEO of Airbus’ planemaking business, Christian Scherer, said.
A U.S.-Chinese deal to restore a fragile trade truce lifted spirits ahead of the global aerospace gathering but some delegates said the industry is adapting to the prospect that base tariffs of 10% could endure, while lobbying for exemptions.
"Despite all this chaos, it should be a good air show for orders, particularly for Airbus, which will be on home turf," said AeroDynamic Advisory managing director Richard Aboulafia.
Even so, weak supply chains and fractured alliances in trade and defence have upended years of planning for the near $1-trilion-dollar industry, days ahead of a crucial NATO summit.
DEFENCE SPENDING
The war in Ukraine and tension in the Middle East have disrupted airspace, re-routed cargo and passenger traffic and increased insurance costs.
European nations, spurred by the war in Ukraine, are ramping up military spending at a pace not seen since the Cold War.
Germany, Poland and Britain have all announced major defence budget increases, including planned spending on air defence, drones and next-generation fighter jets.
The show will feature a wide array of drones, including low-cost, expendable models that proved so effective in the Ukraine war.
Such platforms are increasingly viewed as essential to modern warfare, by offering a cheaper and scalable alternative to traditional manned aircraft.
Many European nations are rethinking their reliance on U.S. defence support amid weakening ties under Trump, reshaping the global defence landscape as AI-powered systems gain traction and political alliances shift.
"If Europeans are paying more on defence, you’d expect them to employ Europeans to build European capacity and capability in the same way the US is served by American provisions," said Byron Callan, a defence industry specialist and managing partner at Washington-based Capital Alpha Partners.
"That’s probably one of the most important changes that’s emerged from the US election and the Russian invasion of Ukraine."
Access to rare earths is another pressing topic.
Environmental concerns, typically a prominent theme at air shows, will again be addressed in a dedicated display but may be relatively muted this year as Trump downplays green initiatives.
At a global airline summit this month, carriers reaffirmed their commitment to net-zero targets but flagged concern over the limited availability of sustainable fuels and next-generation aircraft.
A raft of high-profile studies, such as plans by Airbus for a hydrogen airliner, have slowed or stopped.
Planemakers say taking delivery of current aircraft - burning at least 15% less fuel - is the fastest way to curb emissions. But deliveries have been delayed by supply problems and environmentalists say that jetmakers chasing ever more orders are baking in longer reliance on fossil fuels.
