Airbus forecasts ‘very challenging’ year
By Kevin Done, Aerospace Correspondent, in Toulouse
Published: January 15 2009 09:32 | Last updated: January 15 2009 12:13
Airbus on Thursday said its new commercial aircraft orders had fallen sharply last year, as the European aerospace group forecast “a very challenging year” for the industry in 2009.
Analysts expect further steep declines in new orders during the next two years from the record level set in 2007, as airlines battle falling passenger and cargo traffic and difficulties in raising finance for new deliveries.
John Leahy, commercial director, forecast gross new orders this of between 300 and 400, down from 900 in 2008.
Net new orders fell by 42 per cent last year to 777, from a record 1,341 won in 2007.
The European aircraft maker re-established its clear lead, however, in the duopoly global commercial aircraft industry (for jets above 100 seats), beating Boeing of the US both in the number of new orders and aircraft deliveries.
Airbus said it had delivered a record 483 aircraft last year, nearly 7 per cent higher than a year earlier, including 386 of its A320 family of short-haul jets, the workhorse of many airline fleets, and 12 A380 superjumbos.
Boeing said last week its net new orders had fallen last year by 53 per cent to 662 from a record 1,413 in 2007, while deliveries had fallen by 15 per cent from 441 to 375 under the impact of an eight-week strike in the autumn.
Airbus said its orders in 2008 had been “remarkably strong” in a difficult year and had been worth $100bn, at list prices before discounts, giving it a share by value of the global market of 54 per cent ahead of the 46 per cent won by Boeing.
The deepening recession and the credit crunch already began to have a marked impact last year, however, as its net new orders of 777 were sharply lower than the 900 gross orders it secured after taking account of 123 cancellations and conversions.
It was hit in particular by the bankruptcy and liquidation of Skybus, a start-up low-cost carrier in the US, one of more than 30 airlines that collapsed last year.
Both Airbus and Boeing increased their record order backlogs last year – Airbus to 3,715 and Boeing to 3,714 – but both groups are coming under heavy pressure from airlines to defer deliveries, as carriers struggle with much weaker than expected demand for air travel and the acute shortage of finance.
Tom Enders, Airbus chief executive, said he hoped that Airbus could achieve similar deliveries this year to last year’s record 483. But he warned that production could be cut later this year if needed.
Louis Gallois, chief executive of EADS, the Airbus parent company, said on Monday the group was ready “cautiously” to increase financing support to airlines with a “first priority to protect deliveries in 2009.
Analysts expect Airbus deliveries to peak at around 500 this year but then to fall sharply for the next three to four years, with a drop from the peak to the trough of more than 40 per cent.
Mr Gallois criticised banks for their reluctance to fund aircraft deliveries – many in Europe and North America have withdrawn altogether from aviation finance – especially when loans were being guaranteed by the French, German and UK export credit agencies.
He said Airbus was monitoring the condition of its order backlog very closely for 2009 and early 2010 in order to be ready to reduce production “if necessary as early as possible.”
It had already moved last autumn to freeze the level of output of its A320 family of short-haul jets – 80 per cent of deliveries measured by units last year – at the current rate of 36 a month, instead of rising gradually to 40 a month by the end of this year as previously planned.
Airbus said its Power8 restructuring programme was ahead of target and had generated cost savings of €1.3bn ($1.7bn) in the last two years, more than halfway to the target of savings of €2.1bn by 2010 and €2.75bn by 2012.
EADS shares, which have fallen by almost one-third over the past year, added 3 cents to €12.55 in afternoon Paris trading.
Copyright The Financial Times Limited 2009
By Kevin Done, Aerospace Correspondent, in Toulouse
Published: January 15 2009 09:32 | Last updated: January 15 2009 12:13
Airbus on Thursday said its new commercial aircraft orders had fallen sharply last year, as the European aerospace group forecast “a very challenging year” for the industry in 2009.
Analysts expect further steep declines in new orders during the next two years from the record level set in 2007, as airlines battle falling passenger and cargo traffic and difficulties in raising finance for new deliveries.
John Leahy, commercial director, forecast gross new orders this of between 300 and 400, down from 900 in 2008.
Net new orders fell by 42 per cent last year to 777, from a record 1,341 won in 2007.
The European aircraft maker re-established its clear lead, however, in the duopoly global commercial aircraft industry (for jets above 100 seats), beating Boeing of the US both in the number of new orders and aircraft deliveries.
Airbus said it had delivered a record 483 aircraft last year, nearly 7 per cent higher than a year earlier, including 386 of its A320 family of short-haul jets, the workhorse of many airline fleets, and 12 A380 superjumbos.
Boeing said last week its net new orders had fallen last year by 53 per cent to 662 from a record 1,413 in 2007, while deliveries had fallen by 15 per cent from 441 to 375 under the impact of an eight-week strike in the autumn.
Airbus said its orders in 2008 had been “remarkably strong” in a difficult year and had been worth $100bn, at list prices before discounts, giving it a share by value of the global market of 54 per cent ahead of the 46 per cent won by Boeing.
The deepening recession and the credit crunch already began to have a marked impact last year, however, as its net new orders of 777 were sharply lower than the 900 gross orders it secured after taking account of 123 cancellations and conversions.
It was hit in particular by the bankruptcy and liquidation of Skybus, a start-up low-cost carrier in the US, one of more than 30 airlines that collapsed last year.
Both Airbus and Boeing increased their record order backlogs last year – Airbus to 3,715 and Boeing to 3,714 – but both groups are coming under heavy pressure from airlines to defer deliveries, as carriers struggle with much weaker than expected demand for air travel and the acute shortage of finance.
Tom Enders, Airbus chief executive, said he hoped that Airbus could achieve similar deliveries this year to last year’s record 483. But he warned that production could be cut later this year if needed.
Louis Gallois, chief executive of EADS, the Airbus parent company, said on Monday the group was ready “cautiously” to increase financing support to airlines with a “first priority to protect deliveries in 2009.
Analysts expect Airbus deliveries to peak at around 500 this year but then to fall sharply for the next three to four years, with a drop from the peak to the trough of more than 40 per cent.
Mr Gallois criticised banks for their reluctance to fund aircraft deliveries – many in Europe and North America have withdrawn altogether from aviation finance – especially when loans were being guaranteed by the French, German and UK export credit agencies.
He said Airbus was monitoring the condition of its order backlog very closely for 2009 and early 2010 in order to be ready to reduce production “if necessary as early as possible.”
It had already moved last autumn to freeze the level of output of its A320 family of short-haul jets – 80 per cent of deliveries measured by units last year – at the current rate of 36 a month, instead of rising gradually to 40 a month by the end of this year as previously planned.
Airbus said its Power8 restructuring programme was ahead of target and had generated cost savings of €1.3bn ($1.7bn) in the last two years, more than halfway to the target of savings of €2.1bn by 2010 and €2.75bn by 2012.
EADS shares, which have fallen by almost one-third over the past year, added 3 cents to €12.55 in afternoon Paris trading.
Copyright The Financial Times Limited 2009
