Virgin Group's Sir Richard Branson lashed out at Boeing for it 787 setbacks and for the lengthy Machinists strike last fall. The strike delayed delivery of the 777-300 Extended Range jet that Branson had pegged to launch his V-Australia airline in late 2008. Branson picked up that jet Friday amid Hollywood beach-party flare.
"It really does make us think, 'Do we want to take a risk with Boeing in the future?' " Branson said.
Virgin's Branson wasn't the only one on hand with bad news for Boeing and its work force.
Leasing guru Steven Udvar-Hazy predicted that both Boeing and Airbus may need to cut jet production by late 2009 as air travel continues to decline. The chief executive of International Lease Finance Corp. believes the slowdown in production will come in steps with the two jet makers delivering fewer aircraft in 2010 than in 2008.
"It wouldn't surprise me if in the next 18 months we see a 30 to 35 percent" cutback in production, Udvar-Hazy said.
Boeing's James Bell said earlier this week that it typically takes 18 months for the aerospace company to scale back production. Boeing is so overbooked in 2009 that Bell didn't see a likelihood of production cuts until 2010 -- and then only if the company receives numerous cancellations or deferrals.
Beside the drop in both passenger and cargo air traffic, airlines also face a tightening credit crunch with jet makers including Boeing being forced to work as financier. In the near term, airlines will focus "on survival" not on placing new orders, he said. Those elements combined could make for a rough few years for Airbus and Boeing.
"I think it could be a year when the number of net cancellations or deferrals could exceed the number of new orders," Udvar-Hazy said, noting that's not his prediction.
As of the end of January, however, that's the situation both Boeing and Airbus are in. Boeing is 13 jet orders in the hole for the first month, with 18 new 737 orders but 31 cancellations for the delayed 787. Airbus, which published its January numbers Friday, won four single-aisle A320 orders but lost a total of 12 orders for the same jet last month.
Both ILFC and Virgin are growing impatient with Boeing's blunders on its 787 Dreamliner. Udvar-Hazy has no plans to cancel ILFC's 74 order for the fuel-efficient jet, which he says the airline industry needs.
But "it's been very frustrating for us to see delay after delay," he said.
Virgin's Branson was especially frustrated with the delay of his 777-300ER jet, caused by the strike. Virgin Group's new airline V-Australia had to put off its launch late last year when the 777 was held up by the strike. V-Australia already had customers booked for travel over the Christmas holiday.
"It hurt hundreds of thousands of our customers," Branson said.
Branson, however, rejoiced in the delivery of the new jet and new airline. V-Australia will be the first Australian airline to operate a 777-300ER aircraft. To kick off the carrier's launch, Branson brought in Australian-born celebrities such as Julian McMahon, who stars in TV's "Nip/Tuck."
The exuberant Branson, flanked by red bikini-clad V-Australian crew members, ran outside the hangar under gray, chilly Seattle skies to see the 360-seat 777, named "Didgeree Blue." The jet's inaugural flight, from Sydney, Australia to Los Angeles, is scheduled for Feb. 27.
Reporter Michelle Dunlop: 425-339-3454 or firstname.lastname@example.org.
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