The Farnborough International Airshow 2014 has kicked off and every player in the aviation industry is focused on the event. The seven-day show (July 14-20) is held every even-numbered year in the little town of Farnborough in southeast England, playing host to all the big shots in the business. It provides a glimpse of the latest offerings from Airbus (NASDAQOTH:EADSY), Boeing (NYSE:BA), and many others, and is a good indicator of where the industry is headed.

A shift to wide-bodies
Long-haul aircraft are expected to get the maximum attention at the gathering because there have been recent product launches, while some are still in the pipeline. Airbus and Boeing shall display their newest wide-body fleet, throw some light on the upcoming models, and brag about their ground-breaking technology that's ready to take to the sky. With the new planes that offer greater efficiency, airlines are keen on expanding the wide-body fleet, and are banking on long-haul yields to compensate for declining short-haul yields. The plane makers are competing fiercely for a bigger market share.

Year to date, Boeing is way ahead of its European rival in terms of order receipts. Airbus has had a relatively quieter season, but is speculated to see good order numbers at the airshow.

Airbus may also throw light on the A330neo program that has attracted a lot of attention from the likes of Air Asia X, Lufthansa, and Delta. Re-crafting the plane is "a relatively easy exercise" for Airbus, "but a lot of decisions have to be made" before it's finished, according to Airbus' executive vice-president programs, Tom Williams. According to sources close to the matter, technical work for making new engines could cost $2 billion. Farnborough would provide a showcase for seeing how the aircraft major plans to go about the A330neo program. Air Lease Corp.'s CEO Steven Udvar-Hazy believes that the A330neo has a market of more than 1,000 units.

The faceoff between Boeing 777 and Airbus A350 would be the next big thing to watch out for at the marquee industry event. Already the A350's order books are heavier with a backlog of 812 compared to the 777's 360 in the first quarter of 2014. Though slated to enter service by 2017, the A350-1000 could trounce Boeing's most profitable aircraft, the 777, in terms of orders. But winning 777 orders is crucial for Boeing to ensure a smooth transition to its successor, the 777X, which is scheduled to enter service in 2020. 

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Source: Bloomberg Industries.

Boeing could be desperately looking for orders for the dying 747 program that has a backlog of just 52. The company has reduced its production rate to 1.5 a month as the global air cargo market is showing no signs of improvement. As a survival strategy, Boeing may push to sell the passenger 747, but with what success remains to be seen. 

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Source: Bloomberg Industries.

After receiving clearance for the 787-9 to commercially operate from both the Federal Aviation Administration and the European Aviation Safety Agency, Boeing's out to promote the 787 and bag orders. 

Will deferrals and cancellations play spoilsport?
Asia's top low-cost carrier, AirAsia, has deferred deliveries of 19 A320s, while Singapore-based Jetstar Asia is restraining fleet expansion. The region is reeling from the effect of declining short-haul yields and overcapacity. This is placing aircraft makers in a tough spot as both Boeing and Airbus have huge orders for narrow-bodies. Richard Aboulafia, VP analysis at Teal Group, anticipates that emerging operators including Lion Air and Norwegian could also withdraw orders. 

Narrow-body order flow at the Farnborough Airshow will paint a clearer picture of where the low-cost expansion is headed in the shadow of the current downtrend in Asia. Bombardier has reported orders for 203 narrow-body CSeries planes, but the company plans to touch 300 before the plane enters service next year. The show would underline the aircraft's sales traction and popularity among airlines as it forms more than 58% of Bombardier's thin backlog.

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Source: Bloomberg Industries.

Bombardier's key competitor, Embraer (NYSE:ERJ), also expects to book sizable orders for its next generation E2 jets. The Pratt & Whitney powered aircraft was launched last year at the Paris Airshow and made quite a splash, bagging 222 orders. Embraer expects to maintain the momentum, and Bombardier will look at encroaching Embraer's zone through the CRJ line and CSeries. While pushing E2 jets, Embraer also wants to ensure sufficient orders for the E-jets to facilitate a smooth transition to the reengineered plane. 

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Source: Bloomberg Industries.

Looking forward
There's a lot to look forward to at the Farnborough Airshow, which has come a long way from its debut in 1948, when it was merely a showcase for Britain's domestic players. Aerospace majors Airbus and Boeing will be the main ones to watch, but it would be interesting to see if smaller names can steal the limelight and astound the industry.

ICRA Online and Eshna Basu have no position in any stocks mentioned. The Motley Fool recommends Embraer-Empresa Brasileira. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.