It is Paris Air Show time again and, as has become the tradition, we await news from the OEMs, principally Boeing and Airbus, about their new orders received and new customers wrenched from the clutches of the competition.
We will watch with interest as pole positions change over the course of the week, with the air show recording the duopoly’s battle in the widebody market. Meanwhile, the slightly larger field in the narrowbody segment will engage in their own race to win the fattest orderbook and, more often than not, Boeing and Airbus will again be accounting for the most column inches.
This is clearly one of the biggest parts of the events, both at Farnborough and Paris; after all, they are air shows. With $130 billion of orders announced overall in Paris in 2015 and $124 billion of orders announced at Farnborough in 2016, it is perhaps not surprising that the aircraft and engine OEMs’ travails form the basis of many industry headlines throughout the shows.
Besides that competition, commercial OEMs are of course selling alongside their defense counterparts, and these, too, represent a significant slice of the air show pie when it comes to exhibitors, attendees, hospitality, publicity and news coverage.
Perhaps it is unsurprising then that the MRO and aftermarket space has not really embraced the two major European shows to the same extent as the OEMs, which tend to cast a definite aircraft-shaped shadow over the week, from under which it may be difficult for the aftermarket to shine. That is by no means a criticism of the air shows; it is merely how things have panned out, and in looking at the marketing material, blogs and news stories from the shows, it is apparent that efforts are being made to attract and appeal to MRO and aftermarket participants. Recently, there has been a sense that an MRO presence is increasing at the shows.
The MRO and aftermarket sector are certainly not avoiding the shows, nor are they failing to exhibit there. According to the air show’s published data, Paris 2015 saw 4% of exhibitors from the maintenance, product support, spares and transportation segment (albeit that was down from 6% in 2013), and of the roughly 350,000 attendees, 7% categorized themselves as being involved in maintenance, product support, spares and transportation. However, for those categorizing themselves as being involved in aircraft and engine construction, the percentages are correspondingly higher, at 18% and 26%, respectively. This relatively low level of representation for MRO providers may, in part, be an issue of how businesses are categorized, as 28% of visitors and 21% of exhibitors at Paris 2015 categorized themselves as falling within the somewhat broad description of “services.” As such, there may be a number of MRO or aftermarket participants hidden within that group.
So with attendance of more than one-third of a million people during the course of the week, why are some of the major MRO and aftermarket companies still not joining the party? Why do some attend Farnborough and not Paris, or vice versa? Having spoken candidly to some of the participants in the segment, the view seems to be very much consistent with the reasons above—in other words, the air shows represent a terrific shop window for the OEMs but not so much when it comes to the aftermarket.
If you are a big player in a market, you need to attend trade shows with the gusto, commitment and presence that befits the gravitas and reputation of your underlying business and brand. This of course costs money—a great deal of money. Budgets in the sector, indeed in every sector of every industry, are coming under ever-tighter scrutiny, and stakeholders in the business want to maximize results and return on investment, while the accountants want that done at a specific cost.
Consequently, businesses must be smart about not only the type of events they attend but where those events are. If you are an established aftermarket player in Europe, then perhaps the combination of geography and event type that a European air show represents is not the best way to spend money. Thinking smarter (and even if air shows the world over are deemed to be the preserve of OEMs), perhaps an air show in an emerging market or a market where you are seeking to penetrate represents a better prospect than one on a continent in which you are already established.
There is no doubt that the air shows are a useful showcase for aircraft, engines and weapons systems. The business that they generate and the continued growth of the industry—with more aircraft and engines taking to the skies and with technology improvements keeping more aircraft and engines in those skies for longer—and the overall benefit of these events for the MRO and aftermarket sector are still evident.