SEATTLE, March 21 (Reuters) - Nearly 600 commercial jets parked on desert runways will reenter service in coming years, depressing sales at Boeing Co.(BA) and Airbus SAS(EAD)(EAD), investment bank Merrill Lynch said on Thursday. Since the Sept. 11 attacks slashed air travel demand, airlines have idled more than 400 jets, expanding the "parked fleet" to 1,333, Merrill said in a research report, adding that another 175 jets are likely to follow. The parked fleet includes mostly aging jets that will never return to service, but 587 of the newer aircraft -- roughly a year's current supply from the two big jet makers -- will eventually come back, Merrill predicted. That could hold down new jet sales until 2006, though the uncertainty of the supply overhang will complicate the manufacturers' production plans and could weigh down their stock prices in the near term, Merrill said. "Whilst we see good long-term valuation ... there is significant uncertainty in the medium-term deliveries, driven by unknown demand and over-supply," according to the report. Shares of Boeing, which runs its world-leading jetliner unit from Seattle, are shielded somewhat from swings in airline demand, since jet sales make up only about a third of its market valuation, Merrill said. Commercial jets provided 60 percent of Boeing's 2001 sales of $58.2 billion, but its military operations are worth more, Merrill said, pegging the stock's long-term value at $62.20, 30 percent above its Thursday close at $47.67, up 64 cents. By contrast EADS, which owns 80 percent of Airbus, owes about 75 percent of its valuation to commercial jet sales, Merrill said, estimating its long-term share value at 22.2 euros ($19). EADS shares closed slightly higher at 15.98 euros ($14) in Paris on Thursday, or 38 percent below Merrill's long-term estimate. Britain's BAE Systems Plc(BA), which owns the remainder of Airbus, is primarily a military contractor and the least affected of the three major commercial jet players. Merrill pegged its share value at 4.62 pounds ($6), 32 percent above its Thursday close of 3.50 pounds ($5). Merrill recommends buying Boeing and BAE, but cautions against buying EADS for now. "Until the medium-term picture becomes clearer, we would continue to avoid the commercial-dominated EADS," Merrill reported. Despite the Sept. 11 attacks, Boeing and Airbus delivered a combined 852 jets in 2001, essentially an average year. But many airlines have deferred deliveries scheduled for this year and beyond and deliveries are expected to drop sharply. Boeing expects to ship 380 jets this year, down from 527 in 2001, and Airbus is predicting 300 deliveries, down from 325. After the projected 680 deliveries in 2002, Merrill sees a decline to 558 in 2003 and 631 in 2004, with a full recovery to about 875 not expected until 2006. But the return of the parked fleet to service could easily confound those forecasts. By late this decade, airlines will be taking on more than 1,000 new jets a year, peaking at 1,200 in 2009, Merrill predicts, citing long-term industry growth forecasts of about 5 percent a year, which will push the world fleet to 17,000 in 2008 from about 14,000 now. Airlines have many reasons for bringing back relatively new parked aircraft, for which they may have paid tens of millions. Used jets can also be had for millions less than new jetliners, which cost anywhere from $25 million to $200 million. Newer jets offer better fuel consumption and less costly maintenance and airlines that have booked orders recently have boasted about the price concessions extracted from the manufacturers. ©2002 Reuters Limited.