The Paris Air Show begins next week, and expectations for commercial aircraft orders remain low, reflecting the end of the last super cycle and our entrance into what could be several years of book to bill ratios below one, as the industry catches up with a record backlog equivalent to seven years of production for the most popular narrow body aircraft.
While there is no reason for concern at this juncture, the investment community always feels better during growth periods than in periods that indicate future contraction. Our view is that fewer orders will be a benefit, as it will give the beleaguered supply chain an opportunity to begin to catch their collective breaths and move forward more rationally.
Order Volume:
We expect a scant order volume this year at Paris, with perhaps only 100 wide-body and 400 narrow-body aircraft being announced. While airlines are healthy and profitable, they are absorbing new aircraft at a record pace, and simply lack the capacity for further growth in the near term. Our expectation is that book to bill will be approximately .6 this year for the industry, and only slightly better at about .65 in 2018.
