Wed, Jun 10, 2009
Company Still Has Plenty Of Orders To Fill
The world's largest maker of jet
engines says the air travel slump and fewer orders for new aircraft
will cut its orders by 50 percent in the coming year. Jack Lutze,
vice-president of sales for Europe and Africa, told Reuters on
Tuesday some deferrals were likely for next year's deliveries but
only a few cancellations, a sign that more airlines are likely to
postpone plane buying in the downturn. "Everybody is looking to
push back 2010," Lutze told Reuters on the sidelines of the
International Air Transport Association's (IATA) annual meeting in
Kuala Lumpur.
Still, Lutze said, the company has a large backlog of orders
worth years of production after airlines went on a buying spree and
ordered over $500 billion in new planes earlier this decade. But
this year, the deepening financial crises, weak passenger loads for
pleasure and business, a falling air cargo trade and difficulty
finding financing have all hit airlines hard, and many are
considering delaying orders for new aircraft. Volatile oil prices
have only worsened the problem.
GE Aviation, which makes engines for plane makers such as Airbus
and Boeing said in January it planned to reduce its white-collar
staff by more than 1,000 people this year, but did not plan to trim
its manufacturing workforce. The company has 16,000 salaried
employees. GE management said most of the reductions would through
attrition, retirement, buyout packages, though some layoffs were
expected. Fellow engine maker Pratt & Whitney, is also shedding
1,000 jobs.
The mood at the IATA meeting has been fairly grim, with the
association saying industry losses could top $9 billion this year,
nearly double a forecast made just three months ago. Many airline
CEOs at the event told Reuters this was the toughest environment
they had faced.
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