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Mon, Jul 19, 2004 - Page 12 News List

High oil prices aiding aircraft makers

FUEL EFFICIENCY Fuel-guzzling aircraft are being put in mothballs. Carriers are scurrying to buy planes that are cheaper to operate. Boeing and Airbus like it


The recent surge in oil prices is actually a boon for aircraft manufacturers, encouraging airlines to acquire planes that are more efficient than an earlier generation of fuel guzzlers now sitting idle in US deserts.

The cost of aviation fuel, US$0.30 per liter on June 30, rose 21.8 percent over the previous six months and 33 percent on the year, according to one study by France's Union of Petroleum Industries.

"That could move companies to order newer aircraft that use less fuel rather than trying to bring back the numerous planes that have been parked in the desert in the United States," said Jean-Paul Bechat, chairman of French engine and equipment maker Snecma.

The civil aviation industry went into a tailspin in 2001, brought on by a global economic downturn, armed conflict, terrorism threats and epidemics. The International Civil Aviation Organization has estimated that the sector lost US$6.6 billion last year.

But a recovery that was first detected at the end of last year, which saw a 19.4 percent increase in traffic from January to May of this year, according to the International Air Transport Association, has prompted carriers to reactivate some of the planes parked in the desert and to acquire newer models that consume substantially less fuel than their predecessors.

The latest version in Boeing's 737 line, the 737-900, burns 25 percent less fuel than earlier versions, the 737-200 or 300, the US manufacturer said.

Companies have shipped 141 aircraft of the 737-200 and 300 models to the desert to wait out the crisis.

Boeing also says its future 7E7 model should consume 20 percent less fuel that the A330 of its European rival Airbus.

But Airbus maintains that its giant A380, which will have a passenger capacity of 550 and will be the world's largest airliner, will be 15 percent more fuel efficient per seat than Boeing's 747-400.

In the rivalry between Boeing and Airbus, the Farnborough Air Show, which opens today near London, could give the US firm a chance to reassert itself.

For the first time in its history, Airbus, a subsidiary of the European Aeronautic Defense and Space company, last year delivered more aircraft than its US competitor Boeing, giving it a 52 percent share of the market.

Airbus delivered 305 planes to Boeing's 281. Airbus also eclipsed Boeing in the first three months of this year, delivering 161 aircraft to Boeing's 151.

But the US manufacturer vowed a fierce fight-back and foresees a pickup in the civil aviation sector starting in 2006.

Boeing is in particular banking on the fuel-efficient 7E7, for which it already has 50 firm orders from All Nippon Airways and two from Air New Zealand.

The company hopes to secure 500 to 600 orders between now and the first test flights in 2007.

The British charter carrier First Choice and the Italian airline Blue Panorama have just announced plans to order 10 7E7s.

And in Asia, the 7E7 is said to interest Singapore Airlines, and a Chinese company could likewise come forward.

Airbus meanwhile is pinning its hopes on its A380, for which it has received 129 firm orders, with initial deliveries scheduled for 2006.

Airbus is in addition angling for an A380 contract from China ahead of the 2008 Olympic Games.

The deal could be announced during a visit to China in the autumn by French President Jacques Chirac.

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