Farnborough airshow’s organisers are in a battle with exhibitors over the show’s cancellation, in a row that threatens the future of one of the global aviation industry’s premier events.
Aerospace companies are trying to get back the fees paid to organiser Farnborough International Limited (FIL) or have them credited for the next edition of the show, due in 2022.
However, FIL, an offshoot of British aviation and security trade body ADS, has said it will not return millions in pre-payments it had taken and told exhibitors to claim on insurance policies it told them to take as part of their contracts and covered global pandemics.
About 1,500 exhibitors were expected at the biennial show scheduled for July, which generates hundreds of billions of dollars in aircraft sales. But on March 20, FIL declared a force majeure, saying the pandemic meant it could not be sure the event would take place or that it could complete building work on the exhibition stands and chalets that companies can be charged millions to use.
With the aerospace industry in crisis, some exhibitors desperate for cash are understood to be threatening legal action, having been told by insurers that because FIL declared a force majeure, they are not covered.
One major exhibitor said: “We were told they would not be offering a refund or credit as they had incurred considerable expense in building the exhibition halls and we should claim on insurance.”
A document circulating among a group of smaller British companies due to exhibit warns that unless refunds or credits are offered, FIL’s stance threatens “damaging the reputation of the UK aerospace industry, FIL and ADS as reliable business partners”.
Farnborough’s organisers say that handing back payments could cause FIL to collapse.
The company generates about £35m in a show year and £10m during alternate years, when it is Paris’s turn to stage the world’s biggest aerospace event.
Gareth Rogers, chief executive of FIL, said the decision to cancel came after local councils and emergency services said they could not guarantee cover for the event, and it was uncertain whether lockdowns meant materials needed to build the show would arrive.
He added: “We faced little option but to declare a force majeure, but this is a legal position. We have had conversations with every exhibitor to assure them we will look to make ex gratia payments.
“Handing back money now would put our own survival in question, which would threaten the future of the airshow which has taken place since 1948 ever happening again.”