Aircraft Finance & Leasing News - North America

AirGuide Business, July 14, 2008

7/14/2008

Airbus, EADS

Despite the Pentagon decision last week to re-do the big Air Force refueling tanker competition awarded in February to Airbus parent EADS and its partner Northrop Grumman, top EADS executives remain determined to break into the U.S. defense market. They talked about making a billion-dollar U.S. acquisition next year. And they are eyeing more than tankers. Saturday, the EADS leadership shrugged off the tanker re-bid, expressing confidence that the original award would be sustained. And executives spoke optimistically of winning another big U.S. military airplane contract: aiming to eventually replace more than 450 U.S. Army mid-size transport planes. Boeing doesn't even have a candidate plane for that role. Reported by The Seattle Times. 7/14/2008

Boeing

Boeing commercial plane chief Scott Carson said earlier this year that the company was not likely to hit 1,000 net orders for the fourth year running. Boeing will have more than 600 orders for the year so far when it adds deals announced at Farnborough to its order book. Last year it took an industry-record 1,413 net orders, easing ahead of rival Airbus, even though the company had made downbeat comments about order growth. 7/18/2008

Boeing

Boeing has a much lower exposure to the US market, which it hopes will lessen the blow if airlines' woes continue. Only 10.5 percent of Boeing's order book is destined for US airlines, compared with about 60 percent during the last downturn after September 11. Airbus says 11 percent of its current order book is from US customers. Even so, Boeing is worried by the sharp rise in oil prices, chiefly for its potential effect on the world's economies. Boeing makes no official forecast for oil prices, but said its hired consultants are forecasting USD$70 to USD$80 a barrel for the longer term, as supply and demand eventually balance out. Crude oil futures traded around USD$136 per barrel on Thursday. 7/18/2008

Boeing

Boeing is confident it will not face mass cancellations of jet orders from the world's airlines, even as they come under massive strain from soaring oil prices, hard on the heels of the biggest buying spree in the industry's history. After a three-year boom in sales, the US plane maker has 3,661 aircraft in its order book, worth more than USD$270 billion at list prices, to be delivered over the next six years or so. Rival Airbus has 3,663 planes to deliver. Some industry insiders and analysts predict that as much as 30 percent of that backlog will end up being cancelled as emerging and cash-strapped airlines get cold feet when it comes to handing over the bulk of the money for their planes. But Boeing is holding fast to its view that the fallout will not be nearly as bad as some predict. 7/18/2008

Boeing

Boeing announced firm orders for 197 planes worth $23.6 billion this week, bringing its tally this year to 672 planes. Boeing Commercial Airplanes Chief Executive Scott Carson has predicted fewer than 1,000 orders in 2008 after 1,413 in 2007. 7/17/2008

Boeing

Boeing boosted its at the Farnborough Airshow tally to 197 planes worth $23.1 billion with an apparent headline grabbing deal with Air China for 45 of its planes worth $6.3 billion. But the Air China deal, along with two others from Etihad Airways and Malaysia Airways, were already on Boeing's books -- attributed to unidentified buyers. Removing those from the tally, the Chicago-based plane maker's deals at the world's biggest air show drop to just $5.6 billion. 7/17/2008

Boeing

Boeing Machinists who assemble the company's jetliners filled the former home of the Seattle Sonics on Wednesday to authorize their union to strike if a new labor contract can't be reached. They are demanding a much bigger share of The Boeing Co.'s success of the past three years -- and they are prepared to walk in September and shut down Boeing's jetliner production if they don't get it. 7/17/2008

Boeing

The Boeing Company released its '2008 Current Market Outlook' last week in London. The report, Boeing's 20-year forecast of air travel, foresees a market of 29,400 new commercial airplanes (passenger and freighter) by 2027, taking into account the industry's near-term challenges, including a slowing worldwide economy, surging fuel prices, slowing traffic growth in some markets, and concerted action by airlines to balance costs and revenues. Boeing forecasts a $3.2 trillion market for new commercial airplanes over the next two decades, driven by increasing demand for more efficient new airplanes to replace older aircraft. Strong orders over the past three years have resulted in more than 30 percent of the forecast already in backlog. The influence of current market conditions is reflected in the report, with replacement airplanes taking a greater share of demand (43 percent) than previously forecast (36 percent) -- due to the relative inefficiencies of older aircraft. In addition, Boeing is forecasting a slightly smaller fleet size at the end of the 20-year period (35,800) than predicted in the previous outlook (36,400). Compared with today's fleet of 19,000 units, this represents an annual increase of 3.2 percent per year -- the same as the estimated economic growth rate. These new airplanes will accommodate a forecasted 5 percent annual increase in global air travel, and a 5.8 percent annual increase in air cargo traffic. 7/17/2008