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Airbus announces 20-year forecast, Boeing raises prices – Suppliers Share Wrap

Analysis

Airbus releaseD an updated Global Market Forecast, adding another 900 aircraft to its 20-year demand outlook, raising the total to almost 26,000. The company believes that, dynamic growth in emerging markets, the strength of low-cost carriers particularly in Asia and further market liberalisation and capacity growth on existing routes will drive demand.

Summary
  • Airbus raises its 20-year demand outlook by adding 900 aircraft, bringing the total to almost 26,000.
  • The updated forecast focuses on the narrowbody segment, which is expected to account for two-thirds of demand by volume and 40% by value.
  • Airbus Chief Operating Officer Customers, John Leahy, states that the recovery in demand has been stronger than predicted.
  • Boeing announces a 5.2% increase in list prices across all aircraft models, citing higher wages, materials, and services costs.
  • The list price of Boeing's new B787-8 will be raised by 5%, with a 2% increase for the B787-9.
  • Share prices of both Airbus and Boeing experience slight declines following these announcements.

All the aircraft added to the forecast are in the narrowbody segment, which Airbus believes will account for two-thirds of demand by volume and 40% of demand by value.

Airbus Chief Operating Officer Customers, John Leahy, stated the recovery in demand has been stronger than predicted. The COO also commented that it would have been "ridiculous" for the manufacturer not to launch the A320neo to take advantage of new engine technology. Shares in EADS, parent of Airbus, declined 0.3%

Meanwhile, Boeing confirmed it is raising list prices across the board by 5.2%. The manufacturer last raised prices in 2008, with an average 2.6% increase, following a 5.6% increase in 2007. Boeing has cited higher wages, materials and services costs as behind the increase. The list price of the company's new B787-8 will be raised by 5%, with a 2% increase for the B787-9. Boeing shares were down 0.6% at the close of trading

Selected Original Equipment Manufacturers daily share price movements (% change): 13-Dec-2010

Selected Aviation Suppliers & Leasing daily share price movements (% change): 13-Dec-2010

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