The Paris Airshow is starting. The Boeing Air India crash hangs over it.

Mint

9 hours ago

The 2025 Paris Airshow kicks off on June 16. Aviation enthusiasts can get to see jets up close. Investors and Wall Street analysts can hobnob with industry management.
The focus of the Paris Airshow just shifted.
The biennial junket opens Monday with a very different feel than investors expected. Typically, an air show is a time to collect billion-dollar orders, rub elbows with industry insiders, and show off next-generation technologies. This time, the tragic Boeing 787 Air India crash will tamp down typical excitement.
Thursday local time, Air India flight 171 bound for the U.K. crashed shortly after takeoff, killing 241 of the 242 on board. The plane was a 12-year-old Boeing 787, powered by GE Aerospace GEnx engines, that had accumulated 41,700 flight hours over 7,800 flights. Before Thursday, the twin-aisle 787 jet, introduced in 2011, had never been involved in a fatal crash. Indian officials are leading the investigation, assisted by Boeing, GE Aerospace, and U.S. transportation officials.
Investors can expect updates about the crash in the coming days, which are likely to overshadow activities in Paris. Boeing is maintaining its presence in Paris, but CEO Kelly Ortberg canceled his plans to attend in order to focus on 'our customer and the investigation" of the Air India tragedy, according to a company memo.GE Aerospace postponed its investor event, saying it would provide an update later in June.
In more normal times, investors typically focus on orders at air shows, tallying up numbers for Airbus and Boeing like a sporting event. For the 2025 show, however, 'Orders are basically irrelevant…as the backlogs are so big," says Vertical Research Partners analyst Rob Stallard, adding that some order announcements will likely be deferred because of the Air India tragedy.
Boeing has roughly 6,500 unfilled orders for new jets. Airbus has closer to 8,700. That's more than a decade of demand at current build rates. Increasing build rates is about the most important thing the airframers can do right now. 'We are years into a supply-constrained, not a demand-constrained, environment," says AeroDynamic Advisory managing director Richard Aboulafia, adding people will focus on the supply chain in Paris.
Boeing recently increased its 737 MAX production to 38 per month, the limit set by the FAA following the January 2024 emergency-door-plug blowout of a 737 MAX 9 jet. A manufacturing-quality issue caused that incident. Getting to 38 a month, with additional scrutiny by the FAA, is a sign of improving manufacturing quality. The FAA also recently approved a 787 production rate increase to seven jets a month from five. Another sign of improving process control at Boeing.
It's unlikely a manufacturing issue was to blame in a 12-year-old plane, but it's also too early to speculate on root causes.
Eventually, Boeing wants to take 737 MAX production to north of 50 per month. Each rate increase will likely be spaced out by about six months and approved by the FAA. How Boeing plans to achieve higher production and what Boeing's free cash flow will look like at higher levels of MAX production are key questions Jefferies analyst Sheila Kahyaoglu wants answered. She's also looking for supply-chain updates from a host of aerospace suppliers, including Parker-Hannifin and Howmet Aerospace.
The 2023 Paris Airshow was record-setting. Customers agreed to buy more than 1,100 planes, eclipsing the 2018 total at the U.K.'s Farnborough show of just over 1,000 jets. Farnborough, which is outside of London, and alternates with Paris as the host, followed that in 2024 with a relatively small 242 tally.
Order tallies from shows haven't moved either Airbus or Boeing shares all that much lately. Investors can expect the same this year in Paris. With the backlog at current levels, supply chain and safety are what matters far more.
Through Friday trading, Boeing stock was up roughly 10% over the past 12 months, similar to the S&P 500. The past year has been a roller coaster for the company. The ups and downs included the aftermath of the 737 MAX 9 incident, a new CEO, a new labor contract, trade tensions with China shutting off Boeing sales to the country briefly, and the Air India tragedy.
Airbus and GE Aerospace shares were up roughly 20% and 50%, respectively.
Write to Al Root at [e-mail]