Paris airshow in subdued mood after deadly Air India crash
Every second summer more than 100,000 aviation industry professionals gather in Paris for an airshow – a flying display crossed with a vast conference.The mood at the latest gathering this week was more subdued than usual, after the deadly crash a week ago of a London-bound Air India flight in Ahmedabad.Investigators have recovered the black box from the plane to try to work out the cause of the disaster.The aircraft maker Boeing, and GE Aerospace, which made the 787 Dreamliner’s engines, both cancelled many of their media-facing events out of respect for the families of the 241 passengers and crew who died, as well as at least 30 more people on the ground who were killed.At an event that presents a mix of civil and military aircraft and weaponry, the war between Israel and Iran further overshadowed proceedings.
The French government forced the show’s organisers to cover stands exhibiting Israeli companies’ weapons, an apparent show of France’s opposition to the escalation.Turbo Sjogren, the head of Boeing’s international government and defence, said several Middle Eastern military customers were unable to attend meetings because of the war.The airshow and its British counterpart – held every other year at Farnborough, Hampshire – are usually dominated by a race between Airbus and Boeing to announce the most orders from airlines.Yet Boeing’s string of crises, including two deadly crashes of the 737 Max in 2018 and 2019, have meant that Airbus has taken the lead for several years.The Toulouse-headquartered plane maker announced 142 firm orders plus another 102 provisional orders at the show worth a cumulative $21bn (£15.
5bn), according to Cirium Ascend, the aviation consultancy.That compared with zero orders announced by its US rival Boeing.Darren Hulst, a Boeing vice-president for commercial marketing, said: “Our hearts, our thoughts, our prayers are with all the families that have been impacted by this, as well as our partner and our long-term customer Air India.”Before an investigation shares its findings of the cause of the Air India crash, experts have mostly declined to make a judgment of what the longer-term consequences could be for Boeing.Yet assessments of the state of the global aviation market suggest that demand for air travel will remain buoyant.
Hulst predicted that 43,600 new planes will be needed through to 2044,“As we look to the end of this decade, by 2030, our industry will be about 45% larger than it was in the years before the pandemic,” he said,The majority of those deliveries will be “narrowbody” planes with a single aisle, such as Airbus’s A320 and the 737 family,Other companies are positioning to take advantage of that growth,Perhaps most notably, Britain’s Rolls-Royce, now a specialist in powering the biggest “widebody” planes, wants to make engines for the much bigger narrowbody market.
Tufan Erginbilgic, Rolls-Royce’s chief executive, told reporters that the UK government should part-fund the development of the company’s next generation of jet engines, known as UltraFan.In a direct pitch to the government, he argued that winning orders for narrowbody engines could create 40,000 jobs.“If you look at single-aisle, narrowbody entry could be the single biggest item for economic growth for UK, because it is that big.This is a huge market, right? A £1.6tn market.
”Ahead of the UK’s industrial strategy, expected to be published on Monday, Erginbilgic argued that the government should target support at industries where the country is strongest, which he said included Rolls-Royce’s gas turbines and small modular nuclear reactors (SMRs),Rolls-Royce’s part-owned subsidiary was chosen this month to try to build the first UK SMRs, with the first formal contract expected before October,Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotion“I believe any country needs to support competitively advantaged industries,” Erginbilgic said,“If you support competitively advantaged industries, your position in the market will be sustainable,Because it is already competitively advantaged.
If you give some momentum, that will create lots of export growth, etc, and employment with that.”Rolls-Royce is also a key player in the UK’s defence strategy.Erginbilgic said the government’s recent strategic defence review and pledges to increase military spending to 2.5% of GDP had “de-risked our key programmes”, all but guaranteeing demand for more nuclear reactors for attack submarines and engines for the future Tempest jet, officially known as the global combat air programme (GCAP), whose costs are shared between the UK, Italy and Japan.Erginbilgic also said that the review’s emphasis on autonomous drones could mean future opportunities for Rolls-Royce to power them.
The UK is not the only European country rearming in response to the perceived threat from Russia after its invasion of Ukraine.Yet the Paris airshow also revealed deep tensions in another key European weapons project: a rival “sixth-generation” fighter jet programme between France, Germany and Spain.Éric Trappier, chief executive of France’s Dassault, maker of the previous-generation Rafale jets that were on show in Paris, told Bloomberg TV that “we may go it alone” amid frustrations over who should lead.Michael Schoellhorn, chief executive of Airbus’s Germany-based defence division, said that political intervention might be needed to solve the dispute.Nevertheless, the European government consensus is that military spending must increase – particularly if the US under Donald Trump cannot be relied upon for support.
Deals at the show included Rheinmetall teaming up with controversial US drones startup Anduril to produce weapons in Germany, while Italy’s Leonardo formalised a joint drones venture with Turkey’s Baykar,With renewed war in the Middle East, defence bosses in Paris were keen to move quickly with manufacturing more lucrative weapons on European soil,
UK manufacturing set for a funding boost to reduce energy costs
UK manufacturing is expected to receive support to ease energy costs and boost skills, the Guardian understands, as part of a long-awaited industrial strategy due to be unveiled next week.Energy-intensive industries have long complained that they pay too much for electricity compared with competitors in the EU, while the wider industrial sector has struggled to recruit skilled staff.As Nigel Farage’s Reform party targets support in Britain’s industrial heartlands, ministers are poised to pour funds into boosting the manufacturing workforce with proposals similar to a £600m package for the construction sector announced earlier this year, which underpins plans to build 1.5m homes.Ministers have drawn up plans to take aim at energy costs through two policies, one targeted at businesses that use the most electricity – such as steel and aluminium – and another designed to support manufacturing more broadly
Thames Water renationalisation plans being stepped up, says minister
The environment secretary, Steve Reed, has said the government is stepping up preparations for temporary nationalisation of Thames Water, indicating it will reject pleas from the company’s creditors for leniency from fines and penalties.Thames Water’s largest creditors control the utility and have made a bid to cut some of its debts and provide £5.3bn in new funding to try to turn it around.However, the creditors have said their plan needs considerable leniency from the water regulators Ofwat and the Environment Agency over fines for environmental failings.The Guardian this month revealed that the creditors had asked for immunity from prosecution for serious environmental crimes in return for taking on the company
Ministers set out plans to spend £725bn on UK infrastructure over 10 years
Ministers have pledged to spend £9bn a year on fixing crumbling schools, hospitals, courts and prisons over the next decade as part of the government’s infrastructure strategy.Darren Jones, the chief secretary to the Treasury, set out plans on Thursday to spend a minimum of £725bn over 10 years to boost UK-wide infrastructure and achieve a “national renewal”.Jones announced that £6bn a year would go to repairing hospitals in England, £3bn to fixing and upgrading schools and colleges in England and £600m to courts and prisons in England and Wales.The money will fund building improvements including removing crumbling reinforced autoclaved aerated concrete (Raac) in hospitals and strengthening safety and security in prisons.Jones told MPs: “Done properly it will result in tangible improvements to the fabric of our country, our local roads and high streets renewed so communities are even better places to live
Bank of England warns of ‘elevated’ global uncertainty after leaving interest rates on hold – as it happened
Newsflash: The Bank of England has left UK interest rates on hold at 4.25%.The decision, which matches City expectations, comes as the Bank weighs up the risks to the UK economy from US trade wars and the conflict in the Middle East, which has pushed oil prices higher in the last week.But it’s a split decision – with six of the nine policymaker’s voting to hold, and three voting for a cut.Details and reaction to follow
Bank’s rate decision leaves frustrated Reeves praying for an August cut
Last week’s spending review revealed Rachel Reeves’s plan for reviving the UK’s struggling economy – but one of the most powerful levers for unleashing growth lies out of her reach, at the Bank of England.Thursday’s no-change decision on interest rates from the Bank’s nine-member monetary policy committee (MPC) was widely expected; but the chancellor and her colleagues will be fervently hoping for a cut in August, perhaps sooner – and more before the year is up.The Bank’s governor, Andrew Bailey, had already warned the pace of rate cuts looked uncertain, as a result of Donald Trump’s trade wars. The alarming prospect of a fresh conflict in the Middle East is likely to have made MPC members even more cautious.The minutes from Thursday’s meeting suggested the MPC would “remain sensitive to heightened unpredictability in the economic and geopolitical environment,” and would “continue to update its assessment of risks to the economy”
Bank of England keeps interest rates at 4.25% but hints at cuts to come
The Bank of England has left interest rates on hold at 4.25%, though it signalled further cuts in the cost of borrowing later this year after “clearer evidence” of rising unemployment amid a slowing economy.Six members of the Bank’s nine-member monetary policy committee (MPC) voted to keep rates on hold while three supported a reduction to 4%, to add to the four quarter-point cuts since last August.The Bank’s governor, Andrew Bailey, said interest rates “remain on a gradual downward path” after “seeing signs of softening in the labour market”. He cautioned, however, that the world was “highly unpredictable” and it was difficult to predict when interest rates would next be reduced
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