Aviation giants fly into Farnborough Airshow under Brexit cloud

A330 orders compared to the 787

Bonn, Germany-based DHL Express placed a firm order for 14 Boeing 777 freighters valued at $4.7 billion at list prices, plus took purchase options for seven more 777Fs.

A logo of Qatar Airways is seen at Hamad International Airport in Doha, Qatar June 12, 2017.

The quintessentially English atmosphere of the Royal International Air Tattoo, where straw-hatted VIPs watch fighters thunder over picturesque Cotswolds villages, gives way on Monday to the Farnborough Airshow, where the hard-nose business deals in the $800 billion aerospace and defence sector will be done.

The Farnborough Airshow has kicked off in Farnborough, England.

Higher oil prices and interest rates are seen as a warning sign that the long-running aviation boom may be peaking, while trade tension between the U.S. and China and concern about disruption to supply chains from the UK's departure from the European Union also worrying the industry. It alternates with the Paris Airshow and collectively they account for over a quarter of industry order intake each year.

British Prime Minister Theresa May will meanwhile seek to reassure aviation bosses that her under-fire Brexit plan will not disrupt their supply chains.

"We are going to focus on what we can control", he said. "But we will do so in a way that is good for business and good for our future prosperity".

For now, Sweden is shaping up as the most likely partner and South Korea, Japan and Turkey or Gulf arms-buying countries like Saudi Arabia could be drawn in, arms analyst Francis Tusa said.

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The project faces competition from a rival European one after France announced in June that it would take a leading role on a new fighter program, saying it would start as a bilateral effort with Germany that could be expanded later.

Goshawk Aviation Limited announced an order for 20 Boeing 737 MAX aircraft.

Airbus stands to pull in deals for its A320neo and A350 fleet, while investors are waiting for an update from Boeing on a new aircraft that would slot in between its 737 narrow-body and 787 wide-body jets. Major lessors Air Lease and Avolon are also in town.

Rising demand for various types of passenger planes from emerging economies and the soaring success of no-frills airlines will raise the market's need over the next two decades, Airbus has forecast.

Even so, Boeing lowered its wide-body delivery forecast by 140 aircraft to 8,070, saying higher deliveries over the previous year and longer-range single-aisle planes ate into the rolling forecast.

"There are explanations as to why this wave is now coming".

The two giants will add to record orders for benchmark narrowbody jets, whose waiting lists underpin their near-record share prices, while seeking a recovery in sales of bigger jets. I think the market had to pause a little bit until we could deliver consistently and get to ramp up and rate.

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