Airbus retains title as world’s largest planemaker
by The Associated Press on Jan. 15, 2009, under Edge
TOULOUSE, France – Airbus claimed the title of the world’s largest planemaker on Thursday after delivering a record number of aircraft in 2008, but predicted a difficult year ahead for the industry as airlines curb spending amid the economic crisis.
Airbus CEO Tom Enders said he expects orders to dip below deliveries in 2009 for the first time in six years.
Looking into a crystal ball in a press conference stunt, Chief Salesman John Leahy said he expects between 300 and 400 new aircraft orders, likely at the “low end” of that range.
“It’s looking like a very soft year right now,” he told reporters in Toulouse, southwest France, where Airbus is headquartered. The uncertainty of the depth of the economic and financial crisis makes it very difficult to predict future business, he said.
In 2009, Enders said he expects deliveries to be similar to 2008, when Airbus handed over 483 jets — 30 more than the previous year.
Airbus had already beat rival Boeing Co.’s full-year delivery tally of 375 with its 11-month score. The full-year deliveries announced Thursday officially allows Airbus to keep its title as the world’s biggest planemaker. The U.S. jet maker’s results were hurt by an eight-week machinists strike.
Airbus also beat Boeing on orders last year. It booked 777 net orders valued at $100 billion at catalog prices compared with 662 for Boeing. Airbus’s total included 472 single-aisle A320s.
Airbus’ customers are struggling with slowing air traffic and difficulties raising credit to pay for new jets, causing some airlines to ground planes, cut capacity and delay or even cancel orders. Airbus has installed a “weekly watchtower” to monitor the situation, identifying which airline customers may be in trouble and readying teams to adjust the production tempo if necessary, Enders said.
Airbus, which is in the midst of a restructuring program dubbed Power-8 that aims to shed 10,000 jobs by 2010, has no need for further layoffs for the moment, Enders said. Rival Boeing Co. said last week it plans to cut about 3 percent of its work force, or around 4,500 jobs, as a weakening global economy lowers demand for jetliners.
“We all know we are going into a challenging year for the aeronautics industry,” Enders said.
Airbus is also having trouble ramping up production of its flagship A380 superjumbo. Airbus will fall short of its delivery goal for the superjumbo in 2009, Enders said, predicting 18 A380s will be handed over to customers. It had already downgraded its target to 21 from the 25 originally planned.
With the flagship A380, the planemaker has met with glitches in passing to new serial production techniques, Enders said.
Airbus finally delivered the first superjumbo in late 2007 after a series of technical problems and management errors led to almost two years of delay.
In 2009, Leahy predicted around 10 new orders for the A380, up from nine in 2008. The company said Thursday that Air Austral, based on the Indian Ocean island of La Reunion, has signed a memorandum of understanding for two A380s in an economy class configuration.
Meanwhile, Airbus is struggling to manage delays to the A400M program, which have already cost the planemaker euro1.7 billion ($1.84 billion) in penalties and other charges and led to a public spat with engine suppliers.
Airbus Military and parent company European Aeronautic Defence & Space Co. NV say they underestimated the technical complexity of the program and are unable to meet their commitments to customers. The commercial contracts were not suited for military orders, Enders said.
He called the current setup “a recipe for disaster” and said it would be “irresponsible to continue.”
Airbus Military signed a contract in 2003 with a group representing Belgium, Britain, France, Germany, Luxembourg, Spain, and Turkey for 180 aircraft in the program. Since then, South Africa has ordered 8 aircraft and Malaysia 4 — for a total of 192 planes.
EADS and Airbus have proposed a “new approach” to the seven European NATO countries that ordered the plane in 2003 through procurement agency OCCAR.
“We want to continue the program but we want to continue in a way that ensures success,” Enders said. He said Airbus was “stupid” to accept this contract in the first place, and if it were proposed to Boeing Co.’s military division “they would run away crying.”
