Europe low-cost airlines key in planemaker battle LONDON (Reuters) =97 A $6 billion deal in Europe on Friday underscored the= =20 lynchpin role Europe's low-cost airlines are playing as commercial aircraft= =20 makers Boeing and Europe's Airbus battle to be the industry leader. Airbus= =20 aims to top Boeing for the first time this year with 300 deliveries, but=20 concerns that possible war in Iraq could slow demand for air travel have=20 raised questions about how many planes either will sell. Boeing, which has= =20 forecast 280 deliveries, got a shot in the arm on Friday with the sale of=20 22 737-800s and options for 78 more to Irish no-frills carrier Ryanair, a=20 sale vital to reaching that number, analysts and industry officials said.=20 "Clearly with just the Ryanair commitment there's a sizeable chunk of our=20 production," Marlin Dailey, vice president of European sales at Boeing=20 Commercial Airplanes, told Reuters. Ryanair's British rival easyJet last=20 October ordered 120 Airbus A319 planes and options on 120 more in a deal=20 worth more than $3 billion. Europe's low-fares market is "one of the=20 largest growth markets in the commercial aviation business," Dailey said.=20 Globally, sales to low-fare carriers are running at 20 to 25% of Boeing's=20 commercial aircraft revenues, Dailey said. FULL SERVICE STAGNATION Europe's full-service airlines, like their U.S. peers, are suffering from=20 stagnant growth and oversupply, which has forced more than 2,000 planes=20 into storage worldwide. But low-cost carriers Ryanair and easyJet are=20 posting impressive growth numbers that are driving some of the largest=20 aircraft orders in the industry. Analysts forecast annual growth in=20 Europe's low-fares market of about 25% in coming years, a rate analysts=20 said would fuel further sales. With that kind of growth, Ryanair should=20 have no difficulty in taking delivery over the next eight years of the=20 Boeing planes it ordered, said WestLB Panmure airlines analyst Gert=20 Zonneveld. Low-cost carriers still make up less than 10% of the market in=20 Europe, but they are key drivers of growth because they are creating new=20 routes, often at secondary airports, and use low fares to draw people who=20 don't usually fly. Five airports now serve London, for example, where=20 growth in low-cost carriers is driving calls for expansion. Similarly,=20 low-cost pioneer Southwest Airlines is seen as a bright spot in the=20 otherwise hard-hit U.S. airlines business. For Boeing and Airbus, the low-cost sector is having a large impact on the= =20 model mix driving their revenues. These airlines primarily fly smaller=20 planes such as the Boeing 737 and Airbus A319, products key to growth at=20 both plane makers. Boeing Chief Financial Officer Mike Sears on Thursday=20 said smaller planes would make up 80% of deliveries next year. Airbus,=20 owned by European Aeronautic Defence and Space Co NV and Britain's BAE=20 Systems Plc, has delivered four times as many planes in its A320 range than= =20 larger A330s and A340s. While many of the smaller planes go to full-service= =20 airlines, those carriers are not generating much demand via their low-cost= =20 subsidiaries. Unlike pure low-cost carriers creating a niche at cheaper=20 airports on less competitive routes, full-service companies have lost money= =20 trying to reproduce the idea using expensive major airports. KLM Royal Dutch Airlines got out of the low-cost sector on Friday by=20 selling loss-making unit buzz to Ryanair. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@escape.ca Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: www.pichemas.com TnT Webdirectory: http://search.co.tt *********************************************************