Why the plane market is unlikely to crash

http://www.economist.com/blogs/economist-explains/2016/01/economist-explains-10





TWO YEARS ago at the Dubai Air Show, things were looking rosy for planemakers. The four big Gulf carriers alone, Emirates, Etihad, FlyDubai and Qatar Airlines, bought planes worth more than $170 billion, at list prices, from Boeing and Airbus, the world's two biggest planemakers, in one day. Two years later, at the most recent Dubai show, in November 2015, things looked more worrying for them. There was only one big airline order of note, by Vietjet of Vietnam, for Airbus planes worth $3.6 billion. As a result, some investors are worried that the aviation cycle may have started to take a sharp downwards turn, and that it will hit Airbus and Boeing's future profits. Although Boeing and Airbus recently revealed record production figures, for 2015 new orders net of cancellations fell by almost half at Boeing and a third at Airbus compared with the previous year. But most analysts do not think that the demand for new planes will fall as much as in previous cycles, even if there is a global economic slowdown. Why not?  Read full article: http://www.economist.com/blogs/economist-explains/2016/01/economist-explains-10