Despite delays, sales soar for plane builders
TOULOUSE, France -- The problem for Airbus and Boeing isn't too few customers -- it's getting planes off their production lines fast enough to meet demand.
Together, the rivals won a record 2,754 orders last year. Airbus said Wednesday its backlog will increase this year -- even as new orders slow -- and its passenger jets are mostly sold out through 2011 or even later.
Both companies have wrestled to get new models to the airlines lining up to buy them.
Chicago-based Boeing Co. said Wednesday it was going to push back the inaugural flight for its much-anticipated 787 by as much as three months, delaying the test flight until the end of the second quarter, because of supply chain problems and slow progress on the assembly line. The delay means Boeing won't be able to begin delivering the airplane until early 2009, instead of late this year.
Airbus' flagship A380 superjumbo has been delayed as well, and the company had to redesign its planned competitor to the 787, the A350.
Airbus said it beat its U.S. rival in deliveries last year 453 to 441, though it won fewer orders, 1,341 to Boeing's 1,413.
Despite expectations that high oil prices and a global credit squeeze will hurt the airline industry, both companies are still riding a three-year boom in the sector, partly fueled by new demand from Asian carriers.
"Cycles in this industry used to be peaks and, I guess, sort of canyons or big troughs," said Airbus' chief salesman John Leahy. "Now it looks like we are getting more hills and valleys."
The last canyon followed the Sept. 11 terrorist attacks, which together with high jet fuel prices and health scares like SARS caused passenger figures to drop. While traffic is expected to grow in 2008, a shaky economic outlook means airlines will likely remain conservative in placing new orders.
Airbus CEO Thomas Enders said Wednesday he expects "demand to continue to be strong" in 2008, though not at the level of 2007.
Scott Carson, president and chief executive of Boeing's commercial airplanes unit, has also said he expects fewer orders this year.
Leahy played down Airbus' loss in the order race, saying the record number of orders was still "staggering."
"It doesn't matter who is first," he said. "The main question is, how do we manage the backlog?"
At the end of 2007, Airbus said it had an order backlog of 3,421 aircraft that will take at least six years to fill. It is scheduled to deliver more than 470 planes in 2008.
Boeing's backlog is 3,427 airplanes, which the company projects it will take more than five years to fill. It's set to deliver 440 planes this year.
Boeing's 787 program had been hit with two previous delays. In October, Boeing said it was pushing back flight testing until March and delivery to its first customer, Japan's All Nippon Airways Co., at the end of 2008.
Many industry observers had expected additional delays, which are common with new airplanes.
"The 787 continues to set records for orders, while at the same time management is wrestling with one of the most complex product developments in aero history in terms of both technology and program management," Oppenheimer analyst Myles Walton said in a research note.