by Tim Hepher, Valerie Insinna, Joanna Plucinska and Allison Lampert

PARIS (Reuters) – Global aerospace and defense players are expected to tout cleaner transportation and the robotic weapons of tomorrow while seeking to address pressing supply chain issues at the Paris Air Show. Bourget which opens its doors on Monday in a context marked by the Ukrainian conflict and climate concerns.

The Paris-Le Bourget International Aeronautics and Space Show, held every two years alternately with that of Farnborough, England, will take place until June 25 at the airport located north-east of Paris for the first time in four years and the COVID-19 pandemic which led to the cancellation of the 2021 edition.

The 2023 edition is marked by a context of strong demand for new aircraft from airlines to meet the recovery in air traffic and the sector’s objective of carbon neutrality by 2050.

India’s IndiGo is set to place a record order for 500 A320 Family single-aisle jets from Airbus, Reuters reported in early June. For its part, Air India could also formalize at the Paris Air Show an order for 470 aircraft from Airbus and Boeing.

“About 3,300 planes simply weren’t produced during the COVID years, which represents about 15% of the global fleet,” observes Andy Cronin, who heads the leasing company Avolon.

Some observers estimate that up to 2,000 orders could be placed at the Paris Air Show but many of these will be for existing contracts while some buyers, such as Turkish Airlines, have ruled out any quick decision.

“If that happens, we are entering a ‘bubble’,” said Sash Tusa, analyst at Agency Partners.

AN UNREALISTIC CLIMATE OBJECTIVE?

Meeting a few days ago in Istanbul, Turkey, the world’s airlines expressed their interest in buying planes up to ten years in advance in order to be sure not to be left behind by the strong recovery of the post-pandemic air traffic.

“It’s a seller’s market the likes of which we’ve rarely seen,” a senior industry source said, adding that aircraft prices are on the rise.

However, the aerospace sector may struggle to keep up as the pandemic has deeply disrupted global supply chains.

In the longer term, questions arise as to the capacity to reconcile the growth of air traffic with environmental objectives.

The director general of the International Air Transport Association (IATA), Willie Walsh, assured that the airlines were determined to reach the objective of carbon neutrality by 2050 while acknowledging that it would be “very difficult”.

For environmental activists, the target set is unrealistic due to the low use of so-called sustainable fuels (SAF) in aviation and the only solution to achieve it lies in reducing global traffic.

President Emmanuel Macron, who announced on Friday an investment of 200 million euros to develop the production of SAF, will go to the Paris Air Show on Monday.

THE DEFENSE SECTOR ON ALERT

While commercial aviation is in the headlines, the defense sector is on high alert with the Ukrainian conflict forcing highly fragmented European players in the sector to be more agile and hold more inventory to respond to urgent needs.

Government defense budgets have skyrocketed since Russia invaded Ukraine last year, with Western countries providing military support to Kyiv while developing their own future military arsenal.

Some experts, however, say it is difficult to keep budgets high enough to restock munitions while developing a new generation of fighters, drones and precision weapons.

“Even with all the funds in the US budget, it’s just not possible to do everything,” said Justin Bronk, an expert at the Royal United Services Institute.

“European nations are all operating on a much smaller scale, with fewer fleets, and therefore when it comes to making tough choices and trade-offs, these are much more binary.”

(Report Tim Hepher, Valerie Insinna, Joanna Plucinska, Allison Lampert; Blandine Hénault for the )

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