Vahana, an experimental flying taxi by Airbus, is seen on static display, before the opening of the 53rd International Paris Air Show at Le Bourget Airport near Paris, France. Image Credit: Reuters

Aircraft manufacturers and suppliers big and small will gather at the Paris Air Show to showcase new products and technologies, trumpet orders (both firm, tentative and recycled) and pontificate on the industry.

This year’s event comes amid concerns that the robust commercial aerospace spending cycle that has fuelled record backlogs is getting long in the tooth. Passenger traffic grew 4.3 per cent in April, which was an improvement from a notably weak 3.1 per cent expansion in March but off the long-term average of about 5 per cent.

The common thinking had been that secular changes like the burgeoning middle-class in emerging markets and millennials’ preference for travel experiences would support traffic growth beyond that average rate, and that was what happened for a few years. Whether or not the slackening trend of the past two months lasts, commercial air-travel demand will most likely continue to grow in some capacity, Aengus Kelly, CEO of plane-lessor AerCap Holdings NV, said.

The question is whether Boeing Co. and Airbus SE are already planning to build more planes than the industry will need and whether some customers may soon realise they’ve overpaid for assets or bought plane models that now look less desirable. “We have a view on the value of an asset, so where we see value and price intersect, we will be aggressive,” Kelly said. “You can’t say I’m going to buy growth at any price. If it’s a great sellers’ market, it can’t be a great buyers’ market.”

Profit margins are already showing signs of wobbling at some airlines amid higher costs and competition for fares. That, combined with a slower economic backdrop and the continued grounding of Boeing’s 737 Max jet, may keep a lid on fresh aircraft orders at the Air Show.

American Airlines Group Inc. has pulled the Max from its schedule through September 3, but CEO Doug Parker told shareholders that it’s highly likely the plane will be flying by then. That comment might mean more if the company hadn’t also said it was confident the Max would be recertified by August 19, the previous estimate for returning the plane to American’s schedule.

A Federal Aviation Administration official was more measured, saying the plane should be back in the air by December. Once the Max re-enters service, the impact on Boeing’s deliveries may linger for a few years, Kelly said.

Boeing said this week it booked zero orders in May and delivered 30 planes, down substantially from the same period a year earlier. When asked whether the Max crisis may present an opportunity to negotiate a discount on the Max, Kelly replied “possibly”, but said it’s hard to contemplate much of anything to do with the plane until regulators all across the globe deem it safe to fly again.

There’s also the risk that some of Boeing’s other products get caught in the fray. Europe’s aviation regulator said this week that it would assess commonalities between the 737 Max and the 777X jet that’s meant to enter service in 2020.

Airbus, meanwhile, may unveil the A321XLR — a longer-range version of its largest-single aisle jet — in a bid to undercut the business case for a potential Boeing mid-market aircraft, a decision on which has likely been shelved for the time being amid the Max crisis. Airbus is also reportedly considering making the next version of its best-selling A320neo narrow-body jet a hybrid-electric model. The other hot topic at the Air Show will be the implications of the gargantuan merger United Technologies Corp. with Raytheon Co. The combined company — dubbed Raytheon Technologies Corp. — is set to have $74 billion in sales spanning missiles, commercial jet engines, aeroplane lavatories and avionics.

That United Technologies felt the need to diversify through more exposure to the defence market doesn’t send the strongest vote of confidence that the commercial aviation boom will continue unabated. The combined company’s $8 billion R&D budget will be multiples above peers, and that has to be spooking some rivals, particularly General Electric Co., whose cash flow challenges may keep it from responding in kind.

Some analysts have pointed to Aerojet Rocketdyne Holdings Inc. as a potential next target, while others have debated tie-ups between Airbus and BAE Systems Plc or Safran SA and Thales SA.