His comments below caused a 7% pull back in parent company EADS today on the European exchanges. Would he not be smart to actually come out with a real estimate, take the hit now, and enjoy a recovery later if things get better? I understand that this is part marketing ploy, but he is dealing with peoples' nest eggs, savings, and retirement funding too. Maybe the market already sees through him, which is why they are down 7% so far today.

Any guesses of commercial orders this year? My bet is Airbus will get 160-180 and Boeing 220-250 net.

I am willing to put up 25,000 Delta FF miles to the charity of choice for the one who comes closest. (Sorry Admins: Am I allowed to do this?)


UPDATE 2-Airbus exec raises doubt over '09 order target
Mon May 11, 2009 9:07am EDT* Exec 'would not bet' on reaching 300 gross orders

* Confident air travel to resume sharp growth after crisis

* Says freight carriers in "serious trouble"

(Adds further details, quotes)

By Tim Hepher

PARIS, May 11 (Reuters) - The top sales executive at European planemaker Airbus raised doubts on Monday over its order forecast for 2009, but insisted aviation would recover from its slump in an economy still hooked on air travel.

Airbus, the world's largest producer of commercial airliners ahead of Boeing (BA.N: Quote, Profile, Research, Stock Buzz), is targeting 300-400 gross orders before cancellations in 2009. So far, it has booked only 30.

Commercial Director John Leahy told reporters he still hoped to achieve the company's sales target but conceded the current pace of orders suggested he would fall short.

"I don't think it will be less than a hundred, but if you had to bet today, you would probably bet on fewer than 300," he told a press briefing at the company's Toulouse headquarters, monitored by webcast from Paris.

Leahy said he expected aircraft deliveries to remain broadly flat during the downturn -- the fourth and widely seen as the most testing in as many decades as airlines struggle to fill seats and seek scarce finance to pay for jets they have bought.

Leahy said Airbus could afford to lose up to 12-13 percent of its backlog of 3,600 jets sold because of the size of the order book.

Airbus last week announced plans to cut output of its A380 superjumbo output alongside cuts in production of smaller aircraft. But it has so far kept a 2009 goal of equalling last year's record 483 deliveries.

Parent EADS (EAD.PA: Quote, Profile, Research, Stock Buzz) is due to release first-quarter earnings on Tuesday and may give an update on its 2009 outlook, which foresees "roughly stable" sales based on 483 deliveries.

Airbus delivered 116 aircraft in the first quarter compared with 123 in the first three months of last year.

By cutting production, Airbus is responding to worries that airlines may be unable to afford final payments in time for delivery -- leaving the planemaker with unsold and unpainted planes on the tarmac known to the industry as "white tails".

Airbus last year shelved plans to increase single-aisle production to 40 from 36 planes a month and in February said it would cut monthly production of that family to 34 from October.

Leahy predicted 2011 would be a year of recovery and that Airbus could restore its 40-a-month goal by end-2010 or 2011.



ECONOMIC LINK

Leahy's predictions contrasted with other less optimistic forecasts from industry figures.

The head of one of Airbus's largest customers, lessor International Leased Finance Corp, said in March that Airbus and Boeing may have to scale back production by 25-30 percent by mid-2010.

ILFC is in the process of being sold by AIG (AIG.N: Quote, Profile, Research, Stock Buzz), the troubled U.S. insurer, and Leahy said it had had two bids.

Leahy said he was not concerned about the stability of ILFC, which is the backbone of many airline fleets because, if the sale plans fell through, it would remain part of federal-controlled AIG.

He sought to defuse concerns about the finances of major customers such as Emirates Airlines, Qatar Airways and Abu Dhabi's Etihad in the wake of the collapse of property prices in the Gulf region.

However he said a lot of freight carriers were in "serious trouble" after months of historically weak cargo traffic that economists have blamed on shortages of trade financing.

By 1302 GMT, shares in EADS fell 6.4 percent to 11.31 euros in skittish profit-taking on the eve of results following recent gains.

Leahy said he was confident airline passsenger traffic would continue to double every 15 years, propelled by a rule of thumb that states air traffic grows twice as fast as the economy.

"Air traffic and world economic growth are so intertwined that you can't have on without the other," Leahy said.

He dismissed grim forecasts from airlines body IATA, saying they underplayed the impact of low-cost airlines and ignored domestic travel.

IATA says passenger numbers dropped 11 percent in March and it predicts $4.7 billion in industry losses this year.

Leahy said Airbus saw some early signs that business confidence and trends in air traffic were beginning to recover.

In the worst case, Airbus sees worldwide passenger traffic falling 4 percent this year and flattening in 2010. In the best case, traffic would drop 2 percent this year and rise 4 percent next year, with 2011 growth over 6 percent in either scenario.

(Reporting by Tim Hepher, editing by Marcel Michelson, John Stonestreet)



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Interesting projection for 2009 sales, jimc. I don't know whether to agree or disagree, at this point.

I've just posted a fascinating article from Reuters (http://www.fleetbuzz.com/forums//index.php?showtopic=22280 ) which shows how bad things are for both manufacturers.

While not disagreeing with your 'Leahy show & tell' premise, perhaps the Boeing and Airbus crystal balls aren't just that clear yet ?

I'm not defending Leahy here .. but there are elements of his comments that are certainly true. He seems to acknowledge all the problems (overcapacity, recession, buoyed up fleets - and order books, downturn in passenger numbers etc) but his view that the 'upturn' may be in reach is also feasible, too.

This week we have seen Aer Lngus posting passenger numbers for April which are 10% higher than April 2008. Vueling is stating that it is seeing massive increases in traffic, due in part to it's merger with Clickair. Add to that numbers from Mexico's airports which seem to go against the trend (that may not be the case for late April and May, with the emergence of the swine flu 'pandemic' though) .. and a basic resilience in Australian airport numbers (save April, for SYD). Additionally, some Federal officials in the USA and elsewhere are openly commenting that, in the wider economy, things may have passed the 'bottom'. How much of this is fact or sheer optimism or pure hope .. is another matter.

There are signs .. admittedly small .. that we may be beginning to turn the corner. But of course, anything untoward could de-rail this. And traditionally, aircraft orders lag any upturn in economic activity.

I'd say that 2009 and 2010 are going to be highly interesting years for the likes of Boeing and Airbus. Both manufacturers are on different trajectories and cultural business 'fits' .. which also clouds the big picture. I'm inclined to suggest that in 2-3 months, a clearer picture might emerge. But right now ? Just a tad too difficult to say, definitively .. for me.

I predict Boeing will make a lot more profit this year than Airbus. With order books mostly full for a few years, what happens during this lull due to the economic situation, is not nearly as important as products in the factory, how fast each can respond when the economy rebounds, and what non recurring is planned by each for 2009 and 2010. How Airbus decides to fund the A350 development will also drive Airbus profits significantly.