The biannual Paris Air Show is the largest aerospace trade show globally, serving as the premier platform for aerospace and defense companies to announce new orders, shed light on upcoming projects, and unveil cutting-edge technologies and innovations. A&D industry insiders are eagerly awaiting the 2025 iteration of the air show, slated to take place June 15 to 19.

This year’s show comes at a pivotal moment for the industry. Expectations are high on the heels of an uncertain first half of 2025. Can the show deliver on these expectations — or could it signal a shift in A&D momentum? That was the question at the heart of AlphaSense’s recent expert panel with Matt Bishara and Jeff Knight, two industry veterans with their pulse on the latest happenings.

Below, we leverage insights from this call and other expert views from the AlphaSense platform to gauge what surprises could be in store in Paris.

Find the transcript of our panel call here.

High Order Expectations Amid Lengthy Backlogs

Paris has traditionally been a place for aircraft manufacturers to unveil new orders. That role has faded somewhat in recent years as companies have begun announcing new orders prior to the air show — yet it still offers an opportunity to break news in front of a global audience.

Even as both Airbus and Boeing have already had substantial order volume year to date, our expert panel does not believe this will lead to a disappointing slate of new order announcements in Paris. Expectations of healthy order volume is driven largely by the need to replace aging fleets and fuel efficiency initiatives. 

Boeing’s older 767s and 707s, which are now being retired, have less fuel-efficient engines than newer models. Cost savings are a key consideration in the push for fuel efficiency: Fuel costs represent a significant chunk of an airline’s operating expenses, meaning even a 1-cent reduction in fuel costs can generate $40 million in savings. Which airlines stand to be most affected by fleet replacements? Having deferred its aircraft retirements during COVID-19, United Airlines has the industry’s oldest fleet at 15.8 years on average. For comparison, American Airlines has the youngest fleet of the big three U.S. carriers at 14.1 years. 

International demand is another driver to monitor. Analysts have been expecting a large order from China for as many as 500 Airbus aircraft. For reference, that is more than Airbus’ entire slate of announced orders so far this year (385). The reasoning: China has historically placed large orders, has the financial resources, and has growth forecasts necessitating many single-aisle aircraft.

This expectation of steady demand from China underscores Airbus’ competitive advantage in the country. The company is expanding its production capacity in China, with new production lines coming online, including a brand-new factory for final assembly. These new lines are part of a broader strategy to increase production rates according to our panel — including the ability to build A321s in China, which was not possible before.

I think the Chinese, it’s likely that they’re going to continue to buy from Airbus just to stick [a] pencil in the eye of Boeing because it’s the American company and right now I think the politics are gonna drive some of those decisions. But Airbus is invested in a second final assembly line for single aisle in Tianjin, so they’re going all in to keep the single aisle production domestic, at least [from] China’s perspective.”

– Matt Bhara, Former Supply Chain Director for CFM at Airbus, Expert Panel Call

Conversely, Middle Eastern airlines are seen as moving away from large A380s toward more fuel-efficient, right-sized aircraft. This is in line with the industry’s push to deliver cost savings:

It’s really [about] just getting planes that make a little bit more sense into the fleet, because these are models that burned a lot of money for a long time. A lot of governments aren’t necessarily wanting to support that model into the future, so they need to be running an operation that runs a little bit more profitably. 

“So I think it’s about maybe retiring some of those more ostentatious planes and getting more fuel efficient, maybe right-sizing some of the markets, and putting a product out there that more people are flying.” 

– Jeff Knight, Former Finance Manager at Delta Airlines, Expert Panel Call

Engine Woes Snag Aircraft Supply Chains

Our expert panel believes Paris could shed light onto the status of aircraft delivery backlogs, a major industry pain point often discussed by experts. Year-to-date deliveries are lagging behind targets set in 2024, largely due to engine issues. For instance, GE Aerospace is being held up by LEAP engine deliveries running behind schedule. This is far from a new issue, with our panel pointing out that engines have been “the bottleneck in aircraft production for the last decade or more.”

Idiosyncratic events are compounding these supply chain issues. GE, in particular, is noted as having supply chain management challenges, leading to low inventory and capacity issues, while Pratt & Whitney’s worker strikes are compounding supply chain concerns.

As a result of clogged supply chains, significant backloading of deliveries into the second half of the year will be required in order to meet guidance. Yet whether this materializes is considered an open question, according to our panel. A second-half recovery in engine deliveries may be tough to manage considering that lost delivery slots are notoriously difficult to make up. Industry watchers will be closely monitoring Airbus’ capital market day on June 18 for any supply chain updates or granularity regarding delivery issues.

Another open question: Can Airbus deliver on its goal of producing 75 A320s per month by 2027? Considering its current pace of less than 50 per month, Airbus will have to ramp production significantly to hit its goal. One expert sees this ramp taking longer than anticipated due to rising geopolitical tensions and supply chain issues.

Which companies are considered most at risk due to delivery backlogs? France-based CFM International is seen by our panel as unlikely to meet its delivery targets due to its reliance on Airbus, with Airbus being approximately 10 units per month behind on A320neo deliveries.

Technology and Infrastructure Projects to Come

Paris offers A&D companies an opportunity to wow with groundbreaking technology and sweeping plans. What could be on display at this year’s show?

Our panel is watching for an update on open-fan technology, which Airbus is reportedly exploring for its next-generation A320 aircraft. This technology is lighter than a closed-fan system and offers significant fuel cost savings of up to 20%, as any weight reduction in metal saves significant money. However, open-fan technology has historically faced noise issues and affects an aircraft’s center of mass.

Hydrogen power is another area to watch. Airbus is ramping investment in hydrogen-powered aircraft and our panel sees the company as committed to this focus area.

Airbus and Boeing, you can tell what they’re serious about, at least in my opinion, [by] where they spend their money and for how long they spend it. 

Sometimes you get some R&D type of projects that kind of come and go, but Airbus has been investing in the hydrogen technology for coming close to at least six, maybe even 10 years, and the amount that they’re investing keeps going up.”

– Matt Bhara, Former Supply Chain Director for CFM at Airbus, Expert Panel Call

Elsewhere in aerospace, one expert suggests we could see a demonstration of GE’s CFM RISE technology program at this year’s air show or next. In defense, any tech news will likely center on drones and other unmanned aerial vehicles (UAVs), our panel says. According to one panelist, it is not a matter of how defense budgets will be allocated but rather where that money will be put to work first.

I think right now, where the Department of Defense is going to spend its over $1 trillion dollar budget now [is] on UAVs and drones. So I mean I think those are gonna be the next big areas of growth, at least in defense spending: autonomous, semi-autonomous, augmented technology. … Honda, GE, Airbus — everybody’s got a finger in that pie.

“It’s just gonna be a matter of where the defense department wants to go with it first. [Is it] going to be the Air Force … or is it gonna be ground, or both, all of the above?”

– Matt Bhara, Former Supply Chain Director for CFM at Airbus, Expert Panel Call

Air traffic control issues could also figure in the Paris discussions, as they have come under scrutiny in recent months. These problems warrant significant investment in infrastructure. Yet the Federal Aviation Agency’s three-year plan on air traffic control is broadly seen as optimistic. Due to the sheer scale of the challenges, incremental changes will likely not suffice: A bottom-up revamp of the system is needed.

What’s Next: Gauging Market Factors and Tariff Impacts

Market uncertainty stemming from global trade tensions is broadly viewed as a headwind for certain pockets of the industry and is expected to feature heavily in the Paris discussions, our expert panel suggests. 

Airlines appear optimistic that market uncertainty will not dull consumer appetite for travel. Our panel notes that many airlines have been talking about capacity in a more positive light now than they were even a month ago. Accordingly, many airlines have begun adding new flight destinations, indicating a willingness to take risks in spite of a challenging market. One caveat: Low-cost carriers that rely on growth are particularly vulnerable in the current environment, as delivery challenges can hinder their expansion.

Concerning tariffs, potential impacts vary by company in the eyes of our panel. Pratt & Whitney is considered less exposed to tariff issues due to its smaller presence in China versus competitors. On the other hand, CFM relies heavily on Chinese forgings, though it does have the capability to manufacture in France.

Airlines are also finding creative ways to avoid tariffs by taking deliveries outside the United States. For instance, Delta Airlines is re-routing Airbus A350 imports to an intermediary country before eventually entering the United States. This strategy takes advantage of a loophole requiring import tariffs on new aircraft, since these diverted planes are no longer considered new. Our panel believes, underneath tariff impacts, the underlying demand for aircraft is still robust.

If you can find some creativity with the tariffs … then I think there’s still gonna be that demand there. The market is just not so flush that airlines are going to turn up their nose at a little bit more expensive aircraft.”

— Jeff Knight, Former Finance Manager at Delta Airlines, Expert Panel Call

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