Published: Friday, February 27, 2009
'Global crisis' for Boeing and Airbus
EVERETT -- Air traffic declined again in January, giving airlines little incentive to order or to take delivery of new Boeing Co. or Airbus jets.
"The industry is in a global crisis and we have not yet seen the bottom," said Giovanni Bisignani, director general and chief executive of International Air Transport Association, which represents 230 airlines.
Just last week Bisignani predicted that Boeing and Airbus could see airlines defer or cancel half the jet deliveries scheduled for 2009 because of falling capacity and a weakened credit market. On Thursday, Bisignani's organization reported that international passenger demand fell by 5.6 percent in January 2009 compared with the same month in 2008. It is also a full percentage point worse than the 4.6 percent year-over-year drop in December. Passenger travel has dropped for five consecutive months. The 5.6 percent drop in passenger demand outpaced capacity cuts of 2 percent, IATA reported.
"Aside from the Middle East carriers, passenger demand is falling in all regions," Bisignani said.
But cargo traffic has fared far worse than passenger travel, dropping 23.2 percent in January from the same month in 2008. January was the eighth straight month for falling cargo traffic. Cargo traffic had declined 22.6 percent in December.
"Alarm bells are ringing everywhere. Every region's carriers are reporting big drops in cargo," Bisignani said.
Long the leader in the cargo market, Boeing has more freighter orders to lose than Airbus, with nearly 200 unfilled orders for its cargo planes, including 78 for its delayed 747-8 Freighter. Boeing delivered its first 777 Freighter last week to Air France, which already has delayed deliveries of two of its five 777 cargo planes.
In early January, Airbus pushed back the delivery of its first A330 Freighter from the second half of 2009 to 2010, saying it was responding to high demand for the A330 passenger plane. But Airbus put plans to increase the A330's production rate on hold earlier this month. With 65 firm requests, Airbus has lost at least seven orders for its A330 Freighter.
Airbus already has announced plans to slow production on its A320 production line later this year. Boeing has said it may scale back by as much as 10 percent in 2010 but won't make a decision until May. The company plans to cut its commercial airplanes division work force by 4,500 positions.
IATA predicts the airline industry will post a loss of $2.5 billion this year after losing roughly $5 billion in 2008.
"The only good news is that fuel prices remain well below last year's level," Bisignani said. "But the drop in demand is much more harmful."
"The industry is in a global crisis and we have not yet seen the bottom," said Giovanni Bisignani, director general and chief executive of International Air Transport Association, which represents 230 airlines.
Just last week Bisignani predicted that Boeing and Airbus could see airlines defer or cancel half the jet deliveries scheduled for 2009 because of falling capacity and a weakened credit market. On Thursday, Bisignani's organization reported that international passenger demand fell by 5.6 percent in January 2009 compared with the same month in 2008. It is also a full percentage point worse than the 4.6 percent year-over-year drop in December. Passenger travel has dropped for five consecutive months. The 5.6 percent drop in passenger demand outpaced capacity cuts of 2 percent, IATA reported.
"Aside from the Middle East carriers, passenger demand is falling in all regions," Bisignani said.
But cargo traffic has fared far worse than passenger travel, dropping 23.2 percent in January from the same month in 2008. January was the eighth straight month for falling cargo traffic. Cargo traffic had declined 22.6 percent in December.
"Alarm bells are ringing everywhere. Every region's carriers are reporting big drops in cargo," Bisignani said.
Long the leader in the cargo market, Boeing has more freighter orders to lose than Airbus, with nearly 200 unfilled orders for its cargo planes, including 78 for its delayed 747-8 Freighter. Boeing delivered its first 777 Freighter last week to Air France, which already has delayed deliveries of two of its five 777 cargo planes.
In early January, Airbus pushed back the delivery of its first A330 Freighter from the second half of 2009 to 2010, saying it was responding to high demand for the A330 passenger plane. But Airbus put plans to increase the A330's production rate on hold earlier this month. With 65 firm requests, Airbus has lost at least seven orders for its A330 Freighter.
Airbus already has announced plans to slow production on its A320 production line later this year. Boeing has said it may scale back by as much as 10 percent in 2010 but won't make a decision until May. The company plans to cut its commercial airplanes division work force by 4,500 positions.
IATA predicts the airline industry will post a loss of $2.5 billion this year after losing roughly $5 billion in 2008.
"The only good news is that fuel prices remain well below last year's level," Bisignani said. "But the drop in demand is much more harmful."
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