A gradual recovery in demand is leading Airbus and Boeing to boost the production rates of their airliners.
Airbus will increase narrowbody aircraft production by 50% and widebody production by a third from 2006, the European manufacturer said at the show yesterday.
"We have the orders [to justify this]; otherwise we would not do this," said Airbus chief executive Noel Forgeard. He added that Airbus expected high levels of deliveries next year and so would increase production to meet it. The firm will not have to invest too much in order to increase production levels.
Narrowbody production will be raised from the current 20 aircraft a month to 30, with incremental increases made in 2005. Widebody aircraft production will be raised from the present six a month to eight.
The increase will be to meet demand from the airline industry which is beginning to recover from the recession.
"Two years ago, our customers were suffering very badly and things were fairly bleak," he said. "Today we see the market returning and the outlook is much better." Airline passenger traffic is up 7% and could reach 10% by year end, he added.
"It has already reached the level it was before 11 September. The indications are that it will continue despite the high oil price and trouble in some Middle East countries.
"There are signs that airlines are increasing their prices. Many airlines are returning to profit and in the worst cases their losses have been halved."He added that it would take time before that translated into a marked increase in orders - next year rather than this.
"We expect the order intake this year to remain very flat for both manufacturers."
Boeing expects to make 285 aircraft this year, rising to about 300 in 2005, said Alan Mulally, president of Boeing Commercial Airplanes. The models that are under more pressure for rate increases are the narrowbody 737 family and the 747, he said. Demand for the 737 is being spurred by the buoyant low-cost carrier market, while growth amongst Asian carriers, especially in the freight market, is boosting Boeing's widebody 747.
The Boeing type under the most scrutiny is its 767 which only has a backlog of 24 aircraft. The company will make a decision on the continued production of the civil version of the aircraft in Spring 2005.
In terms of performance in the first half of this year, Forgeard said that his company had secured 58% of new orders against 42% for Boeing.
In that period, the Airbus A330-200 had secured 80% of the market in its category, though he readily acknowledged that the figure was likely to shift as Boeing firms up orders for its rival the 7E7 Dreamliner.
MIKE MARTIN & MARK PILLING
Source: Flight Daily News