Airbus takes the lead over Boeing in Paris

AIRBUS has overtaken its rival Boeing in terms of orders at the Paris Airshow.
One Memorandum of Understanding signed at the show was with the Hungarian Wizz Air for 50 A320 single-aisle passenger jets worth US$3.8 billion. Another, for 20 A320s with China Eastern Airlines, was made for $1.45 billion.

This brings its total for the week to $11.5 billion in orders and agreements. Boeing has only, at time of going to press, managed one $153 million deal with Japan’s MC Aviation Partners for only two aircraft. The US manufacturer feigned nonchalance by suggesting that it hadn’t been waiting for the air show to announce orders. An Airbus spokesman said that the company was expecting more orders before the end of the show but on the final day visitors were leaving early.

However, even Airbus’ sales are a lot lower than previous years with many of the potential customers this year seeming to be operating a policy of ‘look but don’t touch’.

Airbus chief executive officer, Tom Enders, said: “The priority is not to get new orders but to maintain those we have and turn them into deliveries.”

The company has already warned that it expects the output of its factories to fall by up to 25 per cent over the next two years, but it said that it would be able to absorb that drop without having to make widespread job cuts.

However, Louis Gallois, chief executive of EADS, Airbus’ parent company, said that this absorption “has a limit”.
“We need to be careful in the way we manage our manpower,” he said. “We have to be able to increase production again when it is needed.”

Airbus is to freeze production of its wide-body A330s at 8.5 per month, down from 10, while limiting deliveries of A380s to 14, instead of the hoped-for 18 per month.

That works out to about a cut of 15 per cent but analysts are suggesting that both Airbus and Boeing may have to think about cutting it still further – down to 35 per cent – if they are to avoid larger problems.

“We have the flexibility to go further if needed,” said Gallois. “We are very sensitive to what will happen in the second half of the year, to see if we reach the bottom of the swimming pool. We have no capacity now to see what will be the depth of the crisis.”

Meanwhile, Boeing delivered 41 aircraft in May, up from 40 during the same time in 2008. However, it received only 20 orders in May, which is down from 67 in May 2008. It has said that it is optimistic it will be able to deliver all scheduled orders this year.

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