Boeing: Fuel Prices May Slow Airline Orders

Reuters10.05.2011 North America
Boeing: Fuel Prices May Slow Airline Orders

Boeing: Fuel Prices May Slow Airline Orders

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Boeing said that high fuel prices and the social unrest in the Middle East may have an impact on the orders it receives from the region in the short term.

The aircraft manufacturer, which has a backlog of 3,445 airplanes, said 345 of the these have been ordered by airline customers in the Middle East.

Randy Tinseth, the Commercial Airplanes Vice President of Marketing for Boeing said the recent events in the region could possibly affect orders placed by airlines.

"It's possible ... but I think fundamental demand is there and I think airlines will order for the long-term view of the market."    

He said Boeing had 48 cancellations this year, which are a little higher than average. He said that 2011 has not been as good for business as 2010.

"Profitability will be down as well (in 2011) because of high fuel pricing and growth is not as dynamic as we saw last year."    

Boeing has a total of 47 customers in the region including the 3 big carriers Emirates, Qatar Airways, and Etihad Airways.

Tinseth said Boeing's annual forecast shows the Middle East market would require 2,340 airplanes worth $390 billion by 2029, expanding their fleet by over 150%.

He said that the rising fuel prices will be the biggest challenge for the industry. "Fuel price is the largest expense that airlines have and with the 25 to 30% rise we have seen, it is a great challenge and great pressure for airlines."


Source: Reuters




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