Has aviation turned the GFC corner?

After a disastrous start to the year when only a total of fewer than 50 orders have been reported by the two aircraft makers in the first two months of 2010, both Boeing and Airbus have announced plans to now ramp up production.

 

Boeing will accelerate planned rate increases on both the 777 and 747 programs. The accelerated rate increases will support increasing customer demand in the recovering aircraft  market.

 

"Our customers recognise the great capability and value of the 777 and 747-8," said Boeing Commercial Airplanes president and CEO Jim Albaugh. "Market improvement and our conservatively managed approach to production have put us in a position where we see it necessary to raise aircraft output. Increasing our rate is the right thing to do to support our customers."

 

The company will accelerate the 777 program's rate increase to seven aircraft per month (from five per month) by approximately six months, from early 2012 to mid-2011. The 747 program's planned production rate increase to two aircraft per month (from 1.5 per month) will move from mid-2013 to mid-2012. Suppliers for both the 777 and 747 will be prepared to support the accelerated rate increases.

 

"We see 2010 as the year of overall economic recovery within the industry and 2011 a year where airlines return to profitability," said Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes. "As a result, we anticipate an increase in demand for aircraft in 2012 and beyond."

 

The current production rate decisions are not expected to have a material impact on 2010 financial results. The company will provide a complete guidance update when it releases first-quarter financial results. 

 

Airbus will increase the monthly production rate for its single-aisle A320 Family from the current rate of 34 to 36, starting December 2010. The production rate for the long-range A330/A340 Family will be maintained at the current level of eight per month.

 

Airbus' decision to raise its single-aisle production rate is driven by the continuing demand for its eco-efficient aircraft and a record backlog in excess of some 2,300 A320 Family aircraft.

 

"Leading economic indices and business confidence indicators are showing an upward trend again. We see this reflected in the continuing solid demand for our eco-efficient products and our robust backlog. Thanks to our proactive order book management we have been able to keep production stable during the year of the downturn, but now it is definitely time to think ahead," said Tom Williams, executive vice president, programmes. "Aviation is a long-term growth industry. With our prudent decision we will be ready when the market recovers."

 

Airbus delivered a total of 498 aircraft in 2009, including 402 A320 Family aircraft, both new company records for a single year. The company target for deliveries in 2010 is to remain at a similar level to 2009.

 

MREC HERE

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