Airbus Feels the Pain
January 15, 2009
Underscoring the woes of the aviation sector reeling from the effects of the global economic meltdown, European aircraft manufacturing giant Airbus on Thursday spoke of a “horrible” year ahead.
Company head Thomas Enders told reporters this year “may be much more horrible from the customers’ point of view than 2008,” due to the high price of oil in the first half and the economic recession that started in the second.
Enders wasn’t all doom and gloom, though, as he assured everyone that though “2009 will be a very challenging year for the aeronautics industry,” Airbus is prepared and confident.
The good times end
Last year Airbus overtook rival Boeing, pulling in 777 orders and shipping out 483 planes compared to the American giant’s 662 orders and 375 deliveries.
Airbus commercial director John Leahy told reporters that the company expected that number to be cut by half in 2009.
And while 2008 was a good year, considering the circumstances, it pales in comparison to 2007 when the two companies together took in a record 2,754 orders -- 1,341 for Airbus and 1,413 for Boeing.
Airlines feeling the pinch
According to news agency AFP, Singapore Airlines (SIA), one of the world’s most profitable airlines, reported that passengers carried fell by 7.5 percent in December to give a capacity loading of 79.9 percent, down 4.4 percentage points over last year.
"The prevailing global financial turmoil has dampened demand across all route regions, translating to weaker uplifts," SIA added.
Additionally, the amount of cargo transported also went down with SIA only filling 55.2 percent of its available freight space. That’s 6.8 percent less than normal.
Backup in production
This year is also expected to see Airbus deliver fewer A380 superjumbo aircraft to its customers than planned because of continued problems with setting up it’s ‘Power 8‘ restructuring program announced back in February.
Airbus had said it would be able to deliver 21 of the double-decker planes, but now admits they will fall short of that goal by 3 aircraft.
Power 8 is supposed to deliver cost savings of 2.1 billion euros ($2.75 billion) in 2010, with an additional plan bringing another 650 million euros by 2012.
More delays
There was further bad news with the airplane-maker saying there would be delays in meeting its military contracts. As a subsidiary of the European Aeronautic Defense and Space Company (EADS), Airbus has been charged with supplying 180 planes to Germany, France, Spain, Britain, Turkey, Belgium and Luxembourg.
Airbus announced that due to delays and technical problems they would be unable to deliver the planes any time soon and that no timetable could be worked out at the present time.