Airbus, Boeing set for record year as air travel pick-up fuels fleet expansion

PARIS (XFNews) - Airbus and Boeing Co, the two global giants of civil aircraft manufacturing, are heading for a record year as airlines use a pick-up in demand from travellers to renew and expand their existing fleets.

Amid transatlantic sniping over subsidies and state aid given to the companies, Boeing and Airbus have already taken more than 1,000 orders for new commercial planes this year.

Investment by airlines in new aircraft comes despite the soaring costs of aviation fuel, with the renewed confidence grounded in the emergence of the air travel market from a three-year depression following the Sept 11 attacks.

With three months to go until the end of the year, Airbus's commercial director John Leahy has said the companies will push close to the record 1,500 orders taken in 1986.

His counterpart at Boeing, Scott Larson, believes that the industry has never had it so good.

From January to September, Boeing received 605 firm orders and Airbus an estimated 400.

Airbus has delivered 271 aircraft so far this year, a 21 pc increase from the 224 delivered in the same period of 2004, and Boeing has delivered 217.

The US-based manufacturer would have delivered more had it not been for a strike by machine operators during September, when only six aircraft left Boeing factories.

The forecasts for the coming years show that neither company sees any let-up. Airbus expects to deliver more than 400 aircraft in 2006, while Boeing sees its deliveries totalling 390 next year.

Most of the new orders have come from European and Asian airlines that have suffered less than their US-based rivals from the increase in the cost of kerosene linked to the surge in crude oil prices in the last six months.

Aviation fuel now accounts for more than 20 pct of the operating costs of airlines.

Asian and European operators have begun planning for the future and have ordered dozens of more fuel-efficient, mid-sized planes such as the Boeing 787 Dreamliner and the Airbus A350.

Airbus said it hoped to receive 200 orders for the A350 by the end of the year. Airbus' shareholders, the European Aeronautic Defence and Space Co (EADS), and BAE Systems PLC of Britain, last week gave formal backing to the industrial launch of the aircraft, destined to challenge Boeing's Dreamliner.

US-based airlines have invested less and are struggling with the increase in costs caused by the rise in oil prices. The US industry is expected to post a collective loss of 8 ln usd this year, according to a forecast from the industry association IATA.

Delta Air Lines Co and Northwest Airlines Co, the third- and fourth-biggest airlines in the country, have both filed for bankruptcy protection.

However, demand for small aircraft with 120-200 seats from low-cost airlines accounts for more than half of the order books of both Boeing and Airbus.

To keep pace with this demand, Airbus intends to expand its production facilities to build more A320s.

Between now and 2007, the group plans to increase its production of small aircraft to 32 per month compared with 27 today, the highest production level ever reached by the European group, according to chief executive Gustav Humbert.

Despite the buoyancy of the aircraft market, the US and Europe have locked horns in a battle for supremacy in aircraft manufacturing.

Each side argues that government aid provided by the other has provided an unfair advantage in the global aircraft market, breaching rules of global commerce.

Want More Analysis Like This?

CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More