FIZZ, multi-billion-dollar deals and earplugs are the standard fare for the Farnborough Air Show, the biennial aerospace jamboree that kicks off at the Hampshire airport tomorrow.

Earplugs will definitely be required. Among a number of deafening combat aircraft on show, the US Air Force’s new super fighter, the F-22, makes a one-off appearance tomorrow.

Big deals, however, will be few in number, and the champagne may stay on ice. The commercial-airline industry, which in recent years has fattened the two giants of the sector, Boeing and Airbus-owner Eads, with record orders, is facing its worst crisis since the September 11 terrorist attacks.

In a year, airlines have gone from the best of times to the worst due to one factor — the rapid rise in the jet-fuel price, which has shot up faster even than oil. In May, airlines paid $600 a tonne for fuel. Now the price is $1,400 and predicted to go even higher. Fuel typically accounts for 25%-40% of an airline’s total costs.

Iata, the industry trade body, forecasts airlines will lose about $6 billion (£3 billion) this year, with director-general Giovanni Bisignani warning of an “extraordinary” crisis. American airlines have slashed thousands of jobs, while even fast-growing airlines such as Emirates have begun to pull services.

Nick Cunningham, analyst at Evolution, last week issued a report predicting capacity reductions on “a scale that has never been seen before”.

Jim McNerney, Boeing’s chief executive, should therefore be a worried man. He isn’t. Speaking to The Sunday Times ahead of Farnborough, he said fuel-price hikes could even provide a spur to sales.

“It’s a double-edged sword. On the one hand there are a number of carriers in financial difficulties, particularly in America. On the other hand it’s difficult now for airlines not to buy new, more fuel-efficient planes. There’s a tension between those two factors.”

Such has been the sales glut in recent years that Boeing and Airbus have a substantial cushion of orders. The American manufacturer has a $271 billion backlog of work, the largest in its history. Pessimists say these orders could quickly vanish with the airlines that made them, as has happened in previous aerospace booms. So far Boeing has had no cancellations, McNerney said, only three deferrals from US carriers, each of which was accompanied by an increase in the original purchase. “We’re fortunate because, unlike in other cycles, only 10% of our backlog is in America. We’re now trying to satisfy demand that exceeds our ability to manufacture.”

Nor does McNerney subscribe to the apocalyptic view that sustained, high oil prices will mean the end of the “golden age” of commercial aviation, which has brought cheap air travel to the masses.

“There’s no question that those airlines that can’t cover their costs with increased prices will have problems, and the inefficient capacity in the system will be taken out. But there’s no doubt that commercial aerospace is a growth industry and will remain one.”

The stock market appears to take a dimmer view. Boeing’s share price is down by a third over the past year and has underperformed the S&P Composite index, a broad measure of America’s quoted companies, by 20%.

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