Despite emerging market concerns, aerospace firms still betting in Asia- report

February 7
7:03 AM 2014

Aerospace companies are set to ink billions of dollars of deals in the Singapore Airshow next week despite the storm that is happening in emerging markets, the prosperity of which is integral to their plans to continue producing planes at record numbers, Reuters reported.

The Singapore Airshow is a "show and tell" event that gives executives a venue to meet with some of the biggest long-haul carriers in the world, Asian travel tycoons and the military buyers in the region. It is also the biggest aerospace gathering in Asia.

In November, the Dubai Airshow amassed a record of $200 billion worth of deals. While few don't expect buyers in Asia to reach the same deal value, the gathering will determine the appetite of Asia, considered as one of the rapidly- growing regions for aviation, the report said.

Viriginia-based Teal Group Vice President and Aerospace Analyst Richard Aboulafia told Reuters, "Asia is a huge market but has been somewhat eclipsed by the Gulf which has the same idea about how to pursue traffic and got to the orders race a few months before Singapore."

According to industry officials, carriers from Vietnam, India and Thailand have given their orders for more than 100 Airbus or Boeing passenger planes with a price tag of $12 billion. Malaysian Airlines may also order Airbus long-haul and medium-haul jets.

However, executives will be monitoring closely for signs that the financial problems in Indonesia and Thailand, considered as key markets for aviation, will pose problems for economic growth as this will also have a direct effect on the demand of air traffic, the report said.

Aboulafia added, "The manufacturers might be getting ahead of themselves given the troubles in emerging markets. Many of these markets are in some form of currency crisis or economic downturn and the focus will be coming back to the Middle East and a hoped-for North American resurgence."

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