Wed, Jul 21, 2010
Analysts, However, Are Not So Sure
Major orders for both Boeing and Airbus at the top of the
Farnborough Air Show are indications of a strong economic recovery,
right? That is the opinion of the leadership for the two rival
plane makers, but analysts say it's not a sure thing.
On the opening day at Farnborough, Boeing said it had taken
orders for 30 of its 777-300ER jets from Emirates Airline,40 Next
Generation 737s from GE Capital Aviation Services, three
Dreamliners, and 27 additional aircraft, while Airbus touted orders
for 121 planes from a variety of customers on the opening day of
the show, some of those also from GE and other leasing firms. "The
market is clearly coming back and I feel very confident about how
we are positioned to regain -- and retain -- leadership in this
business," said Boeing commercial aircraft division chief James
Albaugh. "Financing has stabilized. There is a lot of pent-up
demand."
And airlines are feeling a change in the wind. The New York
Times reports that the IATA forecasts a global airline profit of
$2.5 billion in 2010, which follows losses of $9.9 billion in 2009
and $16 billion in 2008.
But industry analysts are not as bullish on the recovery.
Richard L. Aboulafia from the Virginia-based Teal Group told the
paper that, in terms of the broader economy, "things are very
uncertain." He said trade demand was indeed showing a strong
recovery, but that was not showing up across the board.
Many of the orders at Franborough are for single-aisle
short-haul jetliners that airlines are buying to replace aging
fleets, and Aboulafia says that part of the market is the "most
flexible" in terms of marketing.
While they agree that Boeing and Airbus are announcing orders
for a lot of airplanes, analysts say they do not expect sales to
reach pre-recession levels in the foreseeable future. But Monday's
announcements are already flight levels above the deals rolled out
at the Paris Airshow last year.
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