Mood at Air Show: Nervous Optimism

The billions of dollars in aircraft orders unveiled at the Paris Air Show suggest that the market for new planes is strong, yet the aerospace world is still fretting about its future.

Kuwait Airways on Monday announced orders and options for 24 Airbus Industrie jets valued at $1.9 billion. Boeing Co. last week unveiled a $2.7-billion order.

The orders show that airlines--whose earnings were severely hurt by the Gulf War--are still in the market for new aircraft in sizable numbers.

Yet the mood at the Paris Air Show, which began last week, has been solemn as plane makers and their suppliers contemplate the possibility of a long, slow period for new orders and the cancellation or delay of existing contracts.

“It’s scary, it’s absolutely scary,” said an executive with a firm that supplies components to engine manufacturers.

Analysts wonder whether the vast backlog of orders built up by aircraft and engine makers will actually be bought by an airline industry that languishes near the bottom of the economic cycle.

The Gulf War, for one, drove up fuel costs and spurred passengers to stay home because of fears of terrorism.

U.S. airlines lost $1.5 billion in the first quarter of the year after red ink totaling $3.9 billion for all of 1990, with much of that coming in the final quarter.

Brian Rowe, senior vice president of General Electric Co.’s aircraft engines subsidiary, said last week that the long-term prospects for the industry were rosy. But he still had some doubts.

“There is . . . a feeling in the industry that the airlines may have overestimated their needs and that current aircraft orders exceed growth requirements by a substantial margin,” he said.