Planemakers look to Asia but credit crisis looms
Written on February 22, 2008
A lack of major orders at the Singapore Airshow could point to a deeper than predicted cyclical downturn for planemakers already smarting from delivery delays on new aircraft.
Manufacturers expect fewer orders in 2008, as the industry comes off a record year for sales and enters a period of ramped up production. Airbus (EAD.PA: Quote, Profile, Research) said on Wednesday that its orders will halve to around 700 from a record 1,341 orders last year.
Boeing (BA.N: Quote, Profile, Research) does not give forecasts, but said it expects orders to exceed the 475-480 planes it is targeting to deliver to customers this year.
But demand for new aircraft could be hit more than the Europe-based Airbus and U.S. rival Boeing expect, as a growing global credit crisis curbs airlines’ ability to finance purchases, and causes a drop in premium and business travel.
“Just like in the home mortgage sector, airlines need to put more equity into financing aircrafts instant payday loan. This will have a cash strain on the airline industry,” International Lease Finance Corp chief executive Steven Udvar-Hazy said in Singapore.
That might make airlines more cautious on increasing capacity by ordering new planes, said Udvar-Hazy, who runs the world’s top plane leasing firm.
CHINA, INDIA ABSENCE
Airlines ordered slightly over $10 billion worth of planes at the Singapore Airshow, a far cry from the $100 billion in orders booked at the Dubai air show last year.
Filed in: marketing.