FARNBOROUGH, England — Defense is set to dominate this year’s Farnborough Airshow as aerospace and arms manufacturers struggle to meet surging weapons demand, even as the commercial aviation sector works to steady a fragile production recovery.
With the war in Ukraine now entering its fifth year and a ceasefire in the Gulf falling apart, the traditional rivalry between Boeing and Airbus for commercial jet orders is expected to take a back seat at the July 20-24 event in England.
“The global security environment is arguably more complex and volatile today than we have seen in many, many decades, and we are watching security threats evolve at a breakneck pace,” said Air Chief Marshal Harv Smyth, head of the Royal Air Force, speaking at an International Air Chiefs Conference held ahead of the show.
Arms manufacturers are arriving at their once-every-two-years gathering amid the largest increase in European defense spending since the Cold War, though questions remain about exactly where and how those funds will be directed.
Some industry leaders are raising alarms that defense technology startups building drones and AI-powered targeting software could shake up the established order — much the way SpaceX disrupted the rocket launch industry. The conflicts in Ukraine and Iran have highlighted the need for faster development timelines and systems that can be produced at scale.
“The younger companies are aggressive, not risk-averse,” said Tom Enders, president of the German Council on Foreign Relations and co-chairman of German defense startup Helsing. “They spend their own money. Procurement agencies and armed forces increasingly understand this is the way for a dynamic fast-moving industry,” added Enders, the former Airbus CEO who also chairs tank maker KNDS.
Some of the new defense dollars will flow toward existing warplanes such as the Lockheed Martin F-35 and the Eurofighter — both of which are scheduled to perform at the show — but startups like Helsing and U.S.-based Anduril are pushing AI-driven concepts including uncrewed fighter systems, even after some early stumbles.
“Valuations are tilting in favour of the defence entrants but…most militaries are still spending the vast amount of their resources on manned platforms,” said Byron Callan, managing partner of research firm Capital Alpha.
Show organizers told Reuters that defense companies will account for half of a record 1,600 exhibitors this year, up from a historical share of about 40%, with notable growth in AI, deep-tech, and finance firms.
On the commercial aviation front, both Airbus and Boeing are expected to announce new orders and reveal the buyers behind previously undisclosed deals. However, with delivery slots already booked well into the next decade, the usual wave of splashy order announcements is likely to generate less buzz than in previous years. Investors are instead keeping their eyes on actual aircraft deliveries, where manufacturers earn the bulk of their profits.
Industry sources indicated that total deals at the show may have difficulty surpassing 300 aircraft — well short of some pre-show estimates of up to 800 jets. The final count could also include orders that were previously announced.
“Winning orders is not the question. It’s not the relevant measuring stick that it used to be because of production capacity constraints,” said Jerrold Lundquist, managing director of advisory firm The Lundquist Group.
The aerospace industry has been battling supply chain problems since the COVID-19 pandemic, particularly with castings and forgings — precision parts manufactured from molten or solid metal that meet strict quality standards.
Resolving those bottlenecks is critical to Airbus reaching its long-delayed goal of boosting single-aisle jet production by roughly 25% to 75 aircraft per month by 2027. Boeing, meanwhile, has signaled it is exploring production rates beyond its current targets as it works to close the gap with Airbus and stabilize its declining market share.
“The supply chain…has improved relative to where it was a year or two ago but (not) to the point where Airbus can pursue its goal of 75,” said manufacturing expert Kevin Michaels, managing director of AeroDynamic Advisory. “And as Boeing raises rates, it’s surely going to cause issues there as well,” he added.
Engine delivery delays have been among the most persistent headaches in aviation’s supply chain, creating frustration for both aircraft manufacturers and airlines. GE Aerospace, one of the world’s largest jet engine producers, said the situation is getting better but that more progress is needed.
“I do think the supply chain has really turned the corner,” GE Aerospace CEO Larry Culp told Reuters. “(There is) more work to do.”
