SARS may deny Airbus its goal: But company still hopes to beat Boeing on deliveries

Airbus may not meet its goal of delivering 300 planes this year because the onset of SARS, a deadly respiratory disease, is causing Asian carriers to push back orders, Chief Executive Officer Noel Forgeard said yesterday.

Airbus needs to meet its delivery forecast to be assured of beating The Boeing Co. for the first time. In its 33-year history, Airbus has never produced more planes in a year than Boeing, which has said it will deliver only 280 jets in 2003.

Industry analysts have said for some time now that they believe Boeing and Airbus will end the year very close in deliveries

Airbus has beaten Boeing three of the last four years in new jetliner orders, but winning the production battle for the first time would be a significant milestone for the European airplane maker, giving it further bragging rights as Boeing's equal.

"Until the SARS phenomenon, air traffic was good" in Asia, Forgeard told reporters while in Beijing.

"If SARS did not happen, I'd say yes, we'd deliver 300 aircraft. Three hundred stand, but the degree of confidence is diminished."

Airbus headquarters in Toulouse, France, later issued a statement saying the company remains on track to deliver 300 planes this year. "This figure carries a higher degree of risk than a few weeks ago, however, when the SARS epidemic was unknown."

Severe acute respiratory syndrome is scaring people away from flying. Cathay Pacific Airways Ltd., Hong Kong's largest carrier, is postponing Airbus deliveries from the first half until the second half of the year.

Asia is seen as the main growth market for plane makers, analysts have said. International terrorism, the war in Iraq and SARS have hurt sales by Airbus and Boeing. Airbus deliveries last year fell to 303 planes. Boeing's fell to 381. Forgeard said he expects the commercial-aircraft market to recover by 2005.

"Airbus's 300 delivery forecast was overly optimistic to begin with given the number of its clients who are in financial trouble as well as the impact of SARS," said Keith McMullan, managing director of Aviation Economics, a consulting company. "I'd see 250 or even below as a more realistic number."

More than 80 percent of the more than 4,500 reported cases of SARS have occurred in Asia, and people have become infected on airplanes. Fear of flying and travel restrictions to Hong Kong imposed by the World Health Organization have caused Cathay Pacific to cancel 45 percent of its flights.

Boeing Chief Executive Officer Phil Condit said on Wednesday that no Boeing deliveries have been affected by the SARS epidemic so far.

A pilot for Eastern, which used both Boeing and Airbus airplanes, once told me that Boeing planes were much superior to Airbus, both in terms of performance characteristics and in redundancy of systems. In other words, the Boeings could fly faster, higher, and were safer.

This was 10 or 12 years ago though, I was wondering if anyone knows if these things are still true today.

2 posted on 04/26/2003 5:07:55 AM PDT by Sam Cree (Democrats are herd animals)

3 posted on 04/26/2003 5:42:16 AM PDT by Sam Cree (Democrats are herd animals)

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.