=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/n/a/2008/01/16/financial/= f132334S50.DTL --------------------------------------------------------------------- Thursday, January 17, 2008 (AP) Airbus, Boeing Swamped by Orders By EMMA VANDORE, AP Business Writer (01-17) 03:54 PST TOULOUSE, France (AP) -- The problem for Airbus and Boeing isn't too few customers — it's getting planes off their production lines fast enough to meet demand. Together, the rivals won a record 2,754 orders last year. Airbus said Wednesday that its backlog will increase this year — even as new orders slow — and its passenger jets are mostly sold out through 2011 or even later. Both companies have wrestled to get new models to the airlines lining up to buy them. Boeing Co. said Wednesday that it was going to push back the inaugural flight for its much-anticipated 787 by as much as three months, delaying the test flight until the end of the second quarter, because of supply chain problems and slow progress on the assembly line. The delay means Boeing won't be able to begin delivering the airplane until early 2009, instead of late this year. Airbus' flagship A380 superjumbo has been delayed as well, and the compa= ny had to redesign its planned competitor to the 787, the A350. Airbus said it beat its U.S. rival in deliveries last year 453 to 441, though it won fewer orders, 1,341 to Boeing's 1,413. Despite expectations that high oil prices and a global credit squeeze wi= ll hurt the airline industry, both companies are still riding a three-year boom in the sector, partly fueled by new demand from Asian carriers. "Cycles in this industry used to be peaks and, I guess, sort of canyons = or big troughs," said Airbus' chief salesman John Leahy. "Now it looks like we are getting more hills and valleys." The last canyon followed the Sept. 11 terrorist attacks, which together with high jet fuel prices and health scares like SARS caused passenger figures to drop. While traffic is still expected to grow in 2008, a shaky economic outlook means airlines will likely remain conservative in placing new orders. Airbus CEO Thomas Enders said Wednesday that he expects "demand to continue to be strong" in 2008, though not at the level of 2007. Scott Carson, president and chief executive of Boeing's commercial airplanes unit, has also said he expects fewer orders this year. Last month, he told the Seattle Post-Intelligencer that if Boeing and Airbus combine for 1,000 to 1,200 orders, 2008 "would kind of be a normal year." Carson was not available for comment Wednesday. Leahy played down Airbus' loss in the order race, saying the record numb= er of orders was still "staggering." "It doesn't matter who is first," he said. "The main question is, how do we manage the backlog?" At the end of 2007, Airbus said it had an order backlog of 3,421 aircraft that will take at least six years to fill. It is scheduled to deliver more than 470 planes in 2008. Boeing's backlog is 3,427 airplanes, which the company projects it will take more than five years to fill. It's set to deliver 440 planes this year. Leahy said the A380 is sold out through 2011 and there are only a few slots available for the single-aisle A320 in 2012. The midsize A350 XWB, which won't be delivered before 2013, is booked through 2016, he said. To meet demand, Airbus expects to raise production of the A320 to 40 per month in 2010, from 34 per month this year and 20 per month in 2003. It hopes to increase production of the 525-seat A380 to four per month in 2010 from one this year. In such an environment, Leahy said he expects to secure better deals for the company's airplanes. Airbus did not give a monetary value for its 2007 orders, which would be worth about $157.1 billion at catalog prices. Airlines usually negotiate substantial discounts to the list price. ABN Amro analyst Sandy Morris said the long-term growth outlook is above average for the industry. "It's a good business to be in because there are only really two players= ," Morris said. Airbus and Boeing's big challenge is meeting production deadlines. Boeing's 787 program had been hit with two previous delays. In October, Boeing said it was pushing back flight testing until March and delivery to its first customer, Japan's All Nippon Airways Co., at the end of 2008. Carson said Wednesday he was "deeply disappointed" by the latest delay b= ut believes the program is fundamentally sound. "When we have tested the technology and its application to this new family of airplanes, our confidence has only increased," he said. Many industry observers had expected additional delays, which are common with new airplanes. "The 787 continues to set records for orders, while at the same time management is wrestling with one of the most complex product developments in aero history in terms of both technology and program management," Oppenheimer analyst Myles Walton said in a research note. Enders confirmed that Airbus plans 13 deliveries this year of the A380, whose first delivery to Singapore Airlines last year was almost two years late. A second challenge comes with the redesign of the A350 XWB. Airbus was forced to come up with new plans, pushing back production after customers didn't like the first version. Airbus said the 300-seat aircraft had notched 292 firm orders by the end of 2007. Airbus ceded the top sales spot to Boeing in 2006 and has faced a series of management and production issues in the past couple of years that led to an overhaul of top executives and a restructuring that aims to find about $2.95 billion in savings by 2010 and cut 10,000 jobs. The company's revenue also has been hurt by the weaker U.S. currency, as the dollar's slide erodes the sale price of its planes. ___ AP Business Writers Ashley M. Heher in Chicago and Elizabeth M. Gillespie in Seattle contributed to this report. ------------------------------------= ---------------------------------- Copyright 2008 AP <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> If you wish to unsubscribe from the AIRLINE List, please send an E-mail to: "listserv@xxxxxxxxxxxxxxxxx". Within the body of the text, only write the following:"SIGNOFF AIRLINE".