Business

<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Tuesday, February 12, 2008 Airbus badly needs A350, analyst says By Michelle Dunlop Herald Writer LYNNWOOD -- The Boeing Co. will keep -- and possibly expand -- its edge in the commercial jet market until rival Airbus introduces its new A350, an analyst says. "It's absolutely essential that Airbus restructures itself and brings that plane to market," analyst Richard Aboulafia of the Teal Group said Monday at the Pacific Northwest Aerospace Alliance conference in Lynnwood. The conference wraps up today. Hit with costly delays to its A380 superjumbo jet, Airbus' best chance of staying competitive with Boeing lies with its A350 Xtra Wide Body aircraft, which has been revised several times. Mostly made of composite material, the A350 has been well received by promising carriers emerging in the Middle East. But the market success enjoyed by the 787 Dreamliner should put Boeing in the position to devise a strong response, Aboulafia said. For the past two years, Airbus' volume has been greater but Boeing performed better in the value of its deliveries, orders and backlog. Boeing grabbed $114.9 billion in commercial jet orders in 2007, compared with Airbus' $98.6 billion. When Airbus begins delivering the A350 sometime around 2014, the European company could turn the corner. Still, Aboulafia says one of the top issues of 2008 will be whether Airbus continues to fund research and development on the A350 to keep that jet on track. The A350 "takes the heart out of the 777 family," Aboulafia says, especially when the A350-1000, which seats at least 350 passengers, enters service in 2015 or 2016. The A350 received roughly 300 orders in 2007. Boeing could respond by making upgrades to its 777, or it could design an entirely new jet. The nightmare scenario for Airbus, Aboulafia said, is if composite material fuselage panels turn out to be less efficient than the one-piece composite barrel, which Boeing is using with its 787. Should Boeing's monolithic barrel prove better, the company could introduce a 777-size composite jet sure to outpace the A350. The real question for Boeing in 2008 isn't the 777 replacement but whether the company can meet its much-revised schedule on the 787. Boeing hasn't estimated how many 787s it will deliver in 2009, nearly a year late. But Aboulafia estimates it will turn over about 50 Dreamliners to customers next year. Like many aerospace analysts, Aboulafia expects jet sales to slow this year. He predicts the industry will see a production peak in 2010 or 2011 and experience a downturn between 2012 and 2014 because of oversupply, especially in the single-aisle jet market. Last week, Scott Carson, president of Boeing Commercial Airplanes, called the company's narrow-body 737 the "product of the year" and predicted U.S. legacy carriers will look to the 737 to replace their aging MD-80s because of the rising cost of fuel. Aboulafia, however, sees those carriers ordering twin-aisle jets such as Boeing's 787.

1. Lawsuit blames county and weed inspector in man’s death 2. Cost of dispute falls on Monroe 3. Salish Sea: Huge body of water now has common name 4. Mind if I smoke? 5. Boeing says 787 fixes are done 6. Worker dies after falling 4 stories from Lynnwood building 7. FOOTBALL FORECAST: Battle of unbeatens highlights first week of state-playoff action 8. Granite Falls-area fire chief placed on paid leave 9. Everett dentist travels world to help 10. Benefit to help injured soldier, his family 2 - Top 10 Stories Most Talked about 3 - Top 10 Stories Most Emailed

• Memorial for Peggy Pritchard Olson set • Bazaar Fever • Hawks proud of historic season • Olson always put Edmonds first • Honoring student veterans • ‘Wheedle' author comes to Lynnwood bookshop • Mavs build early lead en route to easy win • Prep football games of the week (state playoffs) • Tears of laughter, tears of grief • Boeing will build, flight test and deliver 787s in South Carolina to spe ... • Snohomish County EDC promoting job growth in key industry clusters • $4 million grant to advance brain tumor research has Everett links • Providence medical center construction tops off its 12-story steel frame ... • Tulalip affordable housing project to be financed by KeyBank, Raymond Ja ... • Arlington's Lak of Ink has a growing following for Luke Kooyman's creati ... • Bank of the Northwest formed • Cascade Bank earns $1.6 million