=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2002/07/22/i= nternational1634EDT0651.DTL ---------------------------------------------------------------------- Monday, July 22, 2002 (AP) Boeing, Airbus have gloomy outlook for passenger jet sales until 2004 BRUCE STANLEY, AP Business Writer (07-22) 13:34 PDT FARNBOROUGH, England (AP) -- In the first big European air show since Sept. 11, Boeing Co. and Airbus released new aircraft delivery figures Monday showing the market continues to suffer and they do not expect a recovery until 2004 at the earliest. The world's two biggest airliner manufacturers blamed a slower-than-expected economic recovery, particularly in the United States, and lagging demand from business travelers. Executives for the two companies made their downbeat forecasts at the Farnborough International air show, one of the world's largest exhibitions of civilian and military aircraft. The show, which meets every other year just south of London, opens to the public July 27. Boeing has suffered the steeper decline in business due to the industry downturn, which began last spring and accelerated after the Sept. 11 terrorist attacks in the United States. The Chicago-based company expects to deliver 380 commercial aircraft this year, but no more than 300, and perhaps as few as 275, in 2003. Boeing also foresees fewer orders for its twin-aisle jets and a growing interest in its less-profitable single-aisle planes. The reasons are empty seats and cutthroat competition among the airlines buying Boeing planes. Boeing chief executive Phil Condit said airlines are experiencing a plunge in revenues generated per mile flown that is seven times worse than what they experienced when the 1991 Persian Gulf War began. "This is huge," Condit said. "It is the worst decline that the commercial aviation industry has ever seen." Boeing plans to lay off 30,000 employees by year's end and cut production capacity. Airbus, by contrast, has avoided making similar adjustments, Condit said. Boeing does not foresee an improvement until at least 2004 partly because of what Condit described as a "tremendous overhang," or excess, of aircraft for sale. Airbus foresees a less dramatic decrease in business next year. It delivered 325 planes in 2001 and 160 during the first six months of this year. It expects its aircraft deliveries to bottom out at around 300 in 2003. "We see the market starting to ramp up in 2004," said John Leahy, chief commercial officer at Airbus. Leahy suggested Airbus has not had to endure the same restructuring pain as Boeing because it historically had lower sales than its U.S rival. Whereas Boeing has suffered a steep decline in sales from a position of market dominance, Airbus is undergoing a relatively more modest decrease. "We have just flattened out and aren't growing," he said. Airbus, headquartered in Toulouse, France, is owned 80 percent by the European Aeronautic Defense and Space Co. and 20 percent by Britain's BAE Systems. Leahy said Airbus was still operating at a comfortable level of sales. T= he consortium could sell as few as 250 planes each year, he said, before experiencing "serious trouble" requiring it to lay off employees and take other steps at retrenchment. In one of the few new orders unveiled on the show's opening day, KLM Roy= al Dutch Airlines announced it signed a commitment letter to buy six Airbus A330-200s. KLM also acquired rights to purchase another 18 of the 250-seat planes. "Due to the market situation, we have negotiated very favorable conditions," KLM chief operating officer Peter Hartman said without giving financial details. A much-anticipated order by budget airline easyJet for as many as 120 aircraft has been delayed until probably next month, Boeing spokesman Charlie Miller said. Virgin Atlantic Airways also took delivery of its first Airbus A340-600,= a long-haul, four-engine jet that can carry 380 passengers. The A340-600 is the longest passenger jet in the world, and Virgin will take delivery of 10 -- four this year and six in 2006. "After Sept. 11, aircraft manufacturers (and) engine manufacturers had to accept the fact that we are in a new marketplace," Virgin Atlantic chairman Sir Richard Branson said. "There's no question right now that it's more a buyer's market." =20 ---------------------------------------------------------------------- Copyright 2002 AP