Airliner output heads for record levels in 2009 despite downturn
By Max Kingsley-Jones
Civil aircraft manufacturing is forecast to break all production records this year in the face of deteriorating trading conditions and financing shortages brought on by the global financial crisis.
The latest forecasts from the mainline airliner builders Airbus and Boeing put their combined output in 2009 as high as 960 aircraft - up 10% on the strike-affected tally in 2008 and beyond the all-time record of 914 deliveries set in 1999. Similarly, turboprop manufacturer ATR - which has arrested its planned ramp-up - is still on target to match or beat its own 18-year-old production record of 62 aircraft this year.
Boeing declared its guidance for 2009 last week as part of its financial brief, saying it expects to deliver "between 480 and 485 aircraft" and that production is "sold out". This is a 30% increase on the 2008 tally of 375 deliveries, which was significantly lower than planned due to the airframer's 57-day machinists' strike.
Airbus chief executive Tom Enders warned in January that while he hoped to match the 2008 record delivery tally of 480 deliveries this year, there were "contingency plans" for rates to fall back, perhaps to the 2007 level of around 450 aircraft.
"The industry is headed towards serious overcapacity and probably doesn't need all of these jets, especially with cheap fuel making old aircraft look good again," says Teal Group's vice-president of analysis Richard Aboulafia. "If the economy and airline traffic somehow recover this year, we could avoid a serious production-rate fall. But looking at demand now, the more likely case is a very difficult deliveries drop, starting in 2010."
While slowing passenger demand could threaten over-capacity at the airlines, there is also the issue of finance availability for new deliveries. Boeing says it "expects it will finance some commercial aircraft deliveries beginning in the first quarter" and that "the amount of financing in 2009 will exceed normal portfolio run-off due to depreciation and pre-payments, modestly increasing the portfolio size at [leasing arm] Boeing Capital".
Similarly Airbus has indicated that it expects to need an extra $1 billion in export credit agency funding for deliveries in 2009.
The two airframers agree that the number of orders this year will be below output levels - the reverse of the case in recent years. Boeing chief executive Jim McNerney reiterates Enders' words from January that "book to build [ratio] would be less than one". Airbus thinks it will struggle to get much above 300 orders in 2009, and forecasts an upper limit of 400 sales.
