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Dark Clouds and Silver Linings Over Changi

Monday, 13 Feb 2012 | 3:23 AM ET

The last time the Singapore Airshow was held near the city state's Changi Exhibition Centre - next to the airport by the same name, the world was recovering from a painful recession, and the airline industry was coming off the worst demand decline in history.

A USAF C-17 cargo plane flies past during a media preview of the 2012 Singapore Airshow.
Roslan Rahman|AFP|Getty Images
A USAF C-17 cargo plane flies past during a media preview of the 2012 Singapore Airshow.

Fast forward two years and the industry seems to have made a strong recovery. Passenger traffic was up 8.2 percent and 5.9 percent in 2010 and 2011 respectively, according to data from the Air Transport Association (IATA). Still, there remain dark clouds on the horizon. Both profit and passenger growth are slowing, competition is rising and oil prices are $15 higher than they were back in January 2010.

It’s little wonder that the theme of this year's aviation leadership summit being held on the sidelines of the biennial show is Driving Change, Overcoming Challenges Together.

Meanwhile, the two big aircraft manufacturers Boeing and Airbus are facing embarrassments of their own. European aviation authorities have ordered inspections for the entire fleet of Airbus’s A380 after wing cracks were discovered in some of its aircraft. CEO Tom Enders admitted to CNBC on Monday that the company had “screwed up” and the firm will fix the problem at “whatever the cost.”

For Boeing , a production glitch in its new Dreamliner has raised worries about further delays, although a Boeing senior executive told CNBC the company remained on track to boost output of the aircraft fourfold by the end of 2013.

Despite the hiccups, both aviation giants are determined to put on a good show at the event. Boeing has flown in its latest 787 Dreamliner with media tours planned over the next three days. Airbus, on the other hand, will be showcasing its A330 tanker, which is used to refuel planes in the air; and its ACJ318 business jet, which is targeted at the ultra-rich.

Jackie Chan's Embraer Legacy 650 at the Singapore Airshow 2012.
Embraer
Jackie Chan's Embraer Legacy 650 at the Singapore Airshow 2012.

The focus of the show, however, will likely be centered on narrow-bodied aircraft, with both Boeing and Airbus competing for orders from Asia's growing legion of low-cost airlines. Both planemakers now have a new fuel-efficient aircraft to offer airlines: the Airbus A320neo and Boeing's 737 MAX.

Given Asia's rising wealth, the Singapore Airshow will also be a place to showcase the latest private jets, especially for the smaller aircraft makers. Brazil-based Embraer has flown in one of its Legacy 650 planes owned by Hong Kong celebrity Jackie Chan, which has a distinctive dragon livery on the exterior.

For those who are more interested in the thrill and entertainment-value of the event, there are plenty of aerobatic displays. The Singapore Airforce will put on a flying display of its American type F-16 and F-15 aircraft, while neighboring Malaysia will demonstrate its Russian MiG-29. Once the business is done, the airshow will be opened to the public on Saturday and Sunday (February 18th and 19th).

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