Airbus Looks to Asia

Airbus forecasts that 25,000 new aircraft valued at $3.1 trillion will be delivered between 2009 and 2028, but it sees short-term problems.
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TOULOUSE, France (

TheStreet

) --

Airbus

forecasts that 25,000 new aircraft valued at $3.1 trillion will be delivered between 2009 and 2028, but it sees short-term problems.

In an interview published Friday in

The Wall Street Journal

, Airbus chief executive Tom Enders said the company faces two difficult years and could cut production further.

"I certainly cannot exclude that we will cut back production even more," Enders Chief Executive Tom Enders said. "I think we still have two difficult years ahead of us."

In October, Airbus will cut A320 production to 34 a month, down from 36, and it has elected not to implement a once-planned increase in monthly production to 40. It will also forego plans to increase production of A330s and A340s.

In its latest market forecast, the European aircraft maker said emerging economies, airline expansion, fleet replacement and population growth will drive future demand.

Airbus' forecast differs from its competitor's, because Airbus sees more demand for very large aircraft, while

Boeing

(BA) - Get Report

says growth will be highest for single-aisle airplanes. In its recent forecast, Boeing said the world will need 29,000 aircraft, valued at $3.2 trillion, over the next 20 years.

Airbus sees a demand for 1,700 very large aircraft, such as the A380, for 6,250 twin aisle, 250 to 400 passenger aircraft and demand for 17,000 single-aisle aircraft.

The Asia Pacific, including both China and India, will account for 31% of demand, followed by Europe at 25% and North America at 10%. In the two leading markets, India will have 10% growth while China will have 7.9% growth.

Boeing also said that the Asia Pacific region will require 9,000 aircraft, or 31% of the total, while North America will demand 26% or 7,690 aircraft and European demand will be 25%. It said growth will be most rapid in China.

According to Airbus, revenue passenger kilometers, a common industry measure of revenue kilometers flown, is likely to decline by 2% in 2009 but to rise by 4.5% in 2010 and by an average of 4.7% over the next 20 years. That would create a demand for 24,100 new passenger aircraft valued at $2.9 trillion. The world's passenger fleet currently has 14,000 aircraft with 100 seats or more.

On the cargo side, airfreight ton kilometers is forecast to increase annually by 5.2%. Combined with fleet renewal, this would create a demand for about 3,440 freighters, Airbus said. More than 850 would be new aircraft valued at $210 billion, with the remainder converted from passenger aircraft.

-- Written by Ted Reed in Charlotte, N.C.

.