Boeing expects order revival after 15-year low


SEATTLE: Boeing said orders will pick up in 2012, after dropping to the lowest level since 1994 last year, as an economic recovery boosts air-travel demand and airlines return to profit.“We’re starting to see the economy turn around after a really difficult year last year in terms of traffic,” Randy Tinseth, Boeing’s marketing chief, said in an interview. Growth in travel and cargo shipments this year will translate into airline profits and “then we can start to see an increase in demand for new airplanes in 2012,” he said.

Boeing had 142 net orders last year after 121 cancellations, the Chicago-based company said last Thursday. That’s the fewest since 125 orders in 1994, according to spokesman Jim Proulx. The total also trails the 194 that rival Airbus reported as of Nov 30.

Boeing’s orders fell from 662 in 2008, when Airbus had 777, and from a record high of 1,413 in 2007.

“On a gross-order basis we’re probably in the same ballpark, but clearly we had challenges with some of our programmes,” with 83 cancellations for the delayed 787 Dreamliner, Tinseth said. The two rivals have generally split the market over the past few years and “I don’t see any major trends in terms of orders this year,” he said.

Airbus also kept the lead in deliveries, which are when plane makers get the bulk of payments. Boeing said it delivered 481 planes in 2009, while Airbus shipped 498, according to a person familiar with the Toulouse, France-based company’s production who declined to be identified because its figures won’t be released until Jan 12. Airbus has held the lead in deliveries every year since 2003.

Boeing’s deliveries in 2009 rose from 375 in 2008, when factories had been shuttered during a two-month strike by machinists.

Even with the recession, Boeing and Airbus combined built a record number of aircraft last year as the long lead time for jets and the threat of penalties for last-minute cancellations protected manufacturing rates.

Both companies are scaling back now to better match demand after airlines pushed back hundreds of delivery dates because of the global economic crisis.

Boeing will churn out five twin-aisle 777s a month starting in June, from seven now that are built at its Everett, Wash., wide-body factory. Airbus began reducing output of its A320s to 34 a month in October, from 36.

Last year, Boeing delivered 372 single-aisle 737s — a record — along with 88 777s, 13 767s and eight 747 jumbo jets.

“We’ll see a rebound in orders, but mostly in the widebodies” such as the 787 and 777, said Michel Merluzeau, an aerospace consultant with Seattle-based G2 Solutions. “I don’t see how the 737 can sustain those rates beyond 2015” without a significant upgrade to help it compete against new rivals being developed by planemakers in China, Canada and Brazil.

Boeing’s overall delivery rates have been depressed by delays of about two years to both of its new models — the 787 Dreamliner and the 747-8 jumbo jet variant — because of development and manufacturing problems. Airbus in turn delivered 10 A380 superjumbo jets in 2009, 11 short of its initial target and two fewer than in 2008, because of difficulties in customising the new double-decker plane for airlines.

Boeing, which now has a backlog of 3,375 aircraft, had said it would deliver 480 to 485 aircraft in 2009. A target for 2010 will be given when it releases fourth-quarter earnings on Jan. 27, the company said Thursday. Airbus has said it aims to build a similar number of planes in 2008, 2009 and 2010. — WP-Bloomberg