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Airbus expects 50 percent decrease in aircraft orders

An Airbus A380 superjumbo flies past national flags during a demonstration at the Singapore Air Show yesterday. PHOTO: REUTERS

After receiving record orders in recent years, Airbus says it expects orders for new planes this year to drop by half from last year amid slower global growth.

John Leahy, Airbus' chief salesman, said at the Singapore Airshow on Tuesday that the European planemaker is likely to sell about 700 planes this year, down from more than 1,400 orders last year.

"The market, in terms of new orders, will be going down," Leahy told a press briefing. "We have a record backlog so I would expect to see fewer and fewer orders as the market does cool off a bit."

"By definition, the whole world is cooling down a little bit," Leahy said.

The 700 planes that Toulouse, France-based Airbus wants to sell will include more than a hundred A350s, a redesigned widebody 300-seat jet, and about 30 units of the A380, the world's largest commercial jet. Korean Air Lines Co said on Monday it would buy three more double-decker A380s on top of its existing order for five of the world's biggest commercial jets.

Leahy said that orders for planes had peaked in the past three years and manufacturers were now ramping up production to deliver them.

Airbus has about 3,600 planes in its order backlog, he said, about the same number as its US rival, Boeing.

Together, the rivals won a record 2,754 orders last year.

The biggest challenge the companies face is getting planes off their production lines fast enough to meet demand. At the end of last year, the two companies together had enough airplanes on order to keep their factories busy for about five to six years.

Both companies have faced delays in deliveries. Airbus's first A380 was delivered nearly two years late last fall -- a delay that slashed profits at parent company EADS.

Chicago-based Boeing last month said the inaugural flight for the 787 would be delayed up to three months, pushing delivery of the first plane into early next year -- the third time the airplane has been delayed.

Airbus chief executive Tom Enders said his company was learning from the mistakes that caused the A380's delay and that it was making improvements in integrating production processes.

"We're taking quite a few lessons from our own failures on the 380," Enders said.

"The core of that problem was the missing thorough integration of processes inside Airbus," he said. "We have changed that already in the last two years ... and we're on our way to improving them further."

Enders said Airbus was studying the production problems that Boeing currently faces with its supply chain and slow progress on the assembly line, but said he was confident both companies' supply chains were up to par.

"I'm sure that Boeing has taken some lessons from our failures. We are in turn studying carefully what we should take from their problems on the 787," he said. "For supply chain to come to that point is a major concern."

"But we believe we have every reason to assume that our supply chain ... can match the ramp up that we and our competitor have ahead of us," Enders said.
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