Demand for aircraft on the rebound
FARNBOROUGH, England — Demand for new passenger and freight aircraft is rebounding after an unprecedented global downturn and in spite of chronically high fuel costs, U.S. manufacturer Boeing Co. and its European rival Airbus said Monday at Britain’s Farnborough International Air Show.
Boeing announced a $2.96 billion sale of 777-300ER planes to Emirates Airline, while Airbus predicted it would exceed its planned delivery of new planes this year. Boeing foresees 5.2 percent annual growth in global passenger traffic and 6.2 percent growth in air cargo business, after nearly three years of lost production due to the terror attacks of Sept. 11, 2001, the SARS epidemic in Asia, the bursting of the dot.com bubble and the war in Iraq. The company estimates that airlines will buy some 25,000 new planes worth $2 trillion over the next two decades, Boeing Commerical Airplanes chief executive Alan Mulally said at a news conference.
Mulally argued that airlines will need aircraft to make longer and more frequent flights and will prefer flying point-to-point between final destinations rather than via congested hubs. Boeing, headquartered in Chicago, is developing its new medium-sized 7E7 aircraft to meet this hoped-for demand.
About 24 airlines already have paid deposits for more than 200 7E7s, and Boeing expects to convert some of these down payments into firm orders “through the end of this year,” Mulally said.
“These are negotiations we are doing now that will lead to definitive contracts,” he said. The 217-seat 7E7 “Dreamliner” is to be launched in 2008.
Boeing’s deal with Emirates Airline consists of a firm sale of four 777-300ER with options on nine more, for a total contract value of $2.96 billion. The four planes are to be delivered in 2006, with the optional sales to be completed by 2012.
Emirates chairman Sheikh Ahmed bin Saeed Al Maktoum also expressed interest in the 7E7, calling it “a fantastic aircraft” but hinting that his airline would prefer if it were larger.
“We are in discussions to see if they can build this aircraft to carry more people or go further,” he said as he exchanged contracts on the 777-300ERs with Mulally.
Airbus chief executive Noel Forgeard estimated that air traffic grew by 7 percent last year and would rise by 10 percent this year, even though aviation fuel prices also have increased. Airbus, based in Toulouse, France, has received 104 firm orders so far this year and claims more than half of the airline market.
Associated Press Writer Jane Wardell contributed to this report from Farnborough.