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Aviation History
2002
2002 - 3741.PDF
Airframers Airbus's output is set to be better Boeing's for the first time as gloom continues MAX KINGSLEY-JONES COMMERCIAL AVIATION EDITOR A lthough the airline industry recovery did not start to materi alise as optimists had forecast a year ago, there were some glim mers of hope for Airbus and Boeing in 2002. But while the growing low-cost carriers and a few Asian airlines provided some relief for the manufacturers in an otherwise bleak year, it remains to be seen whether similar opportunities will emerge during the next 12 months. The two major manufacturers' deliveries dropped 21% to 670 aircraft in 2002 and are set for a further 15% fall to 570 in 2003. It looks unlikely that business will recover sufficiently to allow an increase in 2004, and analysts currently predict that 2003's output level will be maintained into 2004 and warn that shipments could be even lower. The fall in output is even more dramatic when compared to the level manufacturers had in their sights just two years ago, when deliveries were forecast to reach over 900 aircraft in 2003. This was largely due to a projected ramp-up at Airbus to around 450 aircraft as Boeing sustained an annual output of 500 aircraft. The slowdown has forced Airbus to rein in output to around 290 units, while Boeing has slashed production to 380 air craft in 2002 and around 280 in 2003 - putting it behind the Europeans for the first time ever. Both manufacturers antici pate that output levels will remain similar in 2004. Airbus seems to have ridden the down turn better than Boeing, with its output falling just 10% from the high of 325 air craft in 2000 to around 290 next year as the US manufacturer's production tumbled 47%. Boeing has made public its displeasure at this, accusing Airbus of not reacting to market demand and producing too many aircraft. But Airbus's output was in its ascen dant when the downturn struck, while Boeing was at the top of its cycle, so direct comparisons of their cuts cannot be made. As 2002 closed, the two players had secured firm orders for 450 aircraft, net of cancellations. Remarkably, this is slightly up on the net order tally in 2001, but is largely thanks to some eye-popping deals by low-cost carriers Easyjet and Ryanair, which between them accounted for half of the orders placed. Discount deals On paper the order situation looks better than was feared a year ago, with bettering the 300 net annual sales taken in the trough that followed the 1991 Gulf War. But in reality a large proportion of the 2002 transactions have been high-discount deals designed to see the manufacturers through the short to medium term until demand picks up. The net tally has also remained high, as cancellations have been limited. Manufacturers have often been able to negotiate deferrals rather than ter minations and to place unsold white-tail aircraft at short notice into markets where demand does exist. The medium-term situation could still be bleak, however. The International Civil Aviation Organisation predicts that passen ger traffic worldwide will have remained AIRBUS/BOEING DELIVERIES. ORDERS A Deliveries 1,000 Airbus Boeing 7 Series MDC Backlog Net orders FLIGHT 800 to 600 92 400 200 3,500 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Nolo: 2002 Orders include EasyJet deal (120 aircraft) (est) (est) Delivery predictions based on current production rate forecasts constant in 2002 compared to 2001 - which was down 3% on 2000. ICAO expects traffic will recover by over 7% in 2003, but world traffic will not be back to 2000 levels until 2004, effectively meaning that three years' growth has been elimi nated. And this does not account for any impact another Gulf war would have. The International Air Transport Asso ciation predicts that airlines will lose a com bined $5 billion on international operations in 2002, so it is unlikely that many carriers will be in a buying mood during 2003. There are some bright signs, however. The overall growth figures are distorted by major regional deviations, with the negative impact of the areas badly affected by 11 September - USA, transatlantic and to a lesser extent transpacific - offsetting mar kets such as Asia, Australasia and Europe where traffic levels remain strong. Although 2003's order tally could be bolstered by more sales into these regions, white knights like Easyjet could be few and far between. "Its difficult to see where new orders are going to come from," says one aerospace analyst. The reality is that sales look set to remain flat until well into 2004 - hence the sustained pessimistic output forecasts. Idle fleet The capacity cuts implemented after 11 September saw the idle jet fleet soar to over 2,200 aircraft. This is already declining and further reductions in the parked fleet are likely as newer aircraft return to the skies and older aircraft are removed at the hands of the scrap merchants. But demand for second-hand aircraft remains low. Both Airbus and Boeing had something to celebrate in 2002, beginning deliveries of the A340-600 and 747-400ER to Virgin Atlantic and Qantas, respectively. The A340-600's ultra-long-range sister, the -500, is due to enter service early in 2003 with Air Canada, and the latest A320 fam ily member - the 107-seat A318 - follow ing in the third quarter with Frontier Airlines. Boeing, meanwhile, expects to start flight-testing the General Electric GE90-powered 777-300ER in January and deliver the first aircraft in April 2004. As 2002 closed Boeing finally took the decision to ditch its Sonic Cruiser in favour of the all new "Super Efficient Airplane", and this project should gather pace throughout 2003 as it aims for a launch in a year's time. While the US manufacturer struggles to define a new-generation 747, the Airbus A380 marches on towards a first flight in early 2005, with Cathay Pacific heading the list of the next batch of prospective buyers. With the regional market less affected post-11 September, output levels have www.flightinternational.com FLIGHT INTERNATIONAL 31 DECEMBER 2002 - 6 JANUARY 2003 25
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