Airbus expects 2009 tough year for new plane orders

By JEAN YOON, NEIL CHATTERJEE
June 8, 2009, 3:44pm

KUALA LUMPUR, June 8 (Reuters) – European aircraft manufacturer Airbus said on Monday that 2009 would be a tough year for plane orders, with quite a few being deferred, although it did not expect many more cancellations.

''This is a tough year for orders,'' Airbus Commercial Director John Leahy told Reuters in an interview on the sidelines of the annual meeting of the International Air Transport Association.

Both Airbus and rival Boeing Co. have suffered as travel demand has dried up in the global economic downturn, prompting several airlines to cancel or defer orders.

Leahy said he expected to report orders at the Paris Air Show next week but they would be nothing like last year.

''There will at least be a few announcements, but I can absolutely assure you it will be nothing like the 400 orders we had at last year's airshow,'' he said.

He also said he saw several orders being deferred but he did not expect many order cancellations.

''Cancellations are not as much of an issue as deferrals. I don't think we'll have that many more cancellations,'' he said.

Despite the gloom, Leahy noted United Airlines' potential order for 150 planes signalled recovery for the market.

''It's indicative of the fact that the market is starting to turn. We're starting to see more activity. We are in negotiations with various airlines about new orders,'' he said.

Reflecting the tough environment, Leahy told Reuters on Sunday that Airbus was maintaining its 2009 sales target of 300 gross orders, but it was more difficult to accomplish. Airbus has booked 32 gross orders to end-May.

The head of IATA told Reuters last week that plane orders could fall 30 percent in 2010.

In a related development, the world's airlines have committed to achieve carbon neutral growth by 2020, the head of the global aviation body IATA said on Monday.

''Demand will continue to increase, but any expansion of our carbon footprint will be compensated,'' Giovanni Bisignani told the annual general meeting of the International Air Transport Association in the Malaysian capital, adding the decision was taken on Sunday by the board.

But Bisignani said wide cooperation was needed from allied industries and governments.

''Air navigation service providers must make it possible to fly even more effectively. Fuel companies must supply eco-friendly fuels and governments must give us access to credits in global carbon markets.''

The aviation body chief said the industry would cut emissions by seven percent this year, five percent because of reduced capacity as a result of the economic crisis and two percent as a result of a strategy to reduce emissions.

IATA groups 230 of the world's airlines.