Airbus sees bottom of industry slump

[June 20, 2009]  LE BOURGET, France (AP) -- Airbus CEO Tom Enders was in high spirits on Friday, saying the unexpected crop of orders won at the Paris Air Show shows the heart of the aviation industry is still beating despite the recession.

Unlike archrival Boeing Co. - which managed a single order for two planes worth a paltry $153 million - the European planemaker chalked up firm orders for 58 planes worth $6.4 billion over five days, mostly from Asian and budget airlines.

Including commitments - when customers make a deposit but the sale is not legally binding - Airbus signed deals worth $12.9 billion for 127 planes.

Enders told The Associated Press that Airbus "didn't expect" such a score.

"I think it's a good sign for the entire industry," he said in a interview. "It's a good sign that aviation is not collapsing, that there is not doom and gloom all over."

Not collapsing perhaps, but not brimming with confidence either.

The International Air Transport Association estimates the world's airlines will collectively lose $9 billion this year and face a slow recovery as the economic crisis saps air travel and cargo demand.

Leahy said the air show orders suggest "we are bouncing along the bottom" - although "I don't think this necessarily means that we are in full recovery mode yet."

He said Airbus' target of capturing 300 orders this year "didn't look too accurate a couple of weeks ago" but is now "perhaps achievable."

Boeing tried to shrug off Airbus' better success with orders during the week, saying the company doesn't save up orders to announce at air shows.

But it's year-to-date tally also tails Airbus.

Boeing's orders on June 16 totaled 76 planes this year, but with 66 cancellations its net score falls to just 10.

Before the show, Airbus had 11 net orders and 32 gross orders. It's new net score is 69.

Diogenis Papiomytis, an aerospace analyst with Frost & Sullivan in London, attributed Airbus' performance to its success selling its cash cow, the single-aisle A320, to regional carriers such as Hungary's Wizz Air and Philippines low-cost airline Cebu Pacific.

Leahy said that despite the economic climate "pricing is essentially the same" as last year, denying that he is offering steep discounts to lure cash strapped airlines.

On the fifth day of the show, which opened to the public on Friday and runs through Sunday, Airbus announced another two deals, both memorandums of understanding.

Airbus said Indian airline Paramount Airways agreed to buy 10 A321 planes, each worth $90.3 million at list prices. The deal also includes an option for an additional 10 jets.

And in a last minute deal, inked as Leahy was leaving the show, Turkish Airlines agreed to acquire seven widebody A330s, including five A330-300s and two A330-200s, worth a total of $1.3 billion at list prices.

Still, far fewer deals have been signed than years past, as airlines and governments strapped for cash and credit at the show admired the high-tech hardware but hide their checkbooks.

At the Farnborough International Airshow last year, which alternates with Paris as aviation's biggest gathering, Airbus racked up 247 plane orders worth $38.7 billion at catalog prices, and Boeing landed 197 plane orders worth $23.1 billion.

Behind the wheeling and dealing, the air show was also overshadowed by the tragedy of Air France Flight 447. The French airline said Friday it would give about euro17,500 ($24,000) as an advance to the families of the victims of the flight which never made it to its intended destination of Paris.

Remains of some of the 228 dead, and hundreds of pieces of wreckage reclaimed from the sea off Brazil are helping experts build a picture of what happened to the A330.

Leahy downplayed the significance of the sale of seven A330s, saying an A330 is taking off somewhere in the world every 60 seconds.

"We've had an incident and we have to get to the bottom of it but I think the world's airlines think this is a very flyable airline, a very safe airplane, a very good airplane."

France's Dassault SA also moved forward with talks over the sale of 60 Rafale fighter jets to the United Arab Emirates. In a statement, French president Nicolas Sarkozy's office said he "welcomed the progress" made on the possible sale, announced by UAE officials at the air show Friday.

Sarkozy is pushing a deal for the UAE to purchase twin-engined Rafale fighter jets. Last month France opened its first military base in the Gulf, outside the United Arab Emirates' capital, Abu Dhabi.

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AP Business writer Greg Keller contributed to this report from Paris.

[Associated Press; By EMMA VANDORE]

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