Posted on 06/24/2008 9:59:06 PM PDT by Paleo Conservative
As rising oil prices cause even the strongest airlines to struggle, Airbus and Boeing Co. face the possibility that as many as a third of their orders for new jets could be postponed or canceled.Driven largely by demand from airlines outside the U.S., the rival manufacturing giants over the past three years have collected almost 7,000 orders for modern fuel-efficient jets. For now, both jet makers say they are sold out for much of the next three years and are continuing with plans to raise production rates to meet demand.
But the landscape is shifting as oil prices rattle the underlying economics of the airline industry. Some airlines, including JetBlue Airways Corp. and Delta Air Lines Inc., are already taking steps to defer deliveries or rid themselves of orders. Others are starting to repeat steps they took after the Sept. 11, 2001, terror attacks, such as permanently parking gas guzzlers and selling newer jets to leasing companies for cash before leasing them back on a monthly basis.
The combined value of the orders for Airbus and Boeing planes exceeds $500 billion at list prices, .................................
Officials at Boeing and Airbus, a unit of European Aeronautic Defence & Space Co., say orders for their jets are spread across a diverse group of carriers world-wide, insulating them from regional economic swings. But they acknowledge that they are in almost daily talks with airlines seeking to cancel or defer deliveries...................
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Mr. Udvar-Hazy predicts that 25% to 30% of the two makers' order books -- roughly equivalent to the number of planes that were intended to accommodate airline growth rather than replace aging planes -- could be subject to what he called the "flake-out factor" if oil prices continue their unprecedented rise.
(Excerpt) Read more at online.wsj.com ...
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Drill here, drill now, save jobs. Makes sense to me.
When I was a kid (say 1973) we flew only when paid for by my Dad's business, and when my grandfather died suddenly (1000 miles away.)
There will be a day in the not so distant future that Boeing and Airbus will have to consider a merger.
Yes, we should drill here but that will not be enough to significantly lower the price of oil.
Put Chavez' and Ahmadinejad's heads on pikes?
Rush has pointed out that oil-rich nations are buying airliners. His point is that that is actually the canary in the coal mine of "peak oil" - it would make no sense to buy gas-guzzling planes if the fuel to make them something other than museum pieces will not be forthcoming.
--------------------------------------------- If Clinton hadn't vetoed ANWR drilling, or if the Democrats in the Senate hadn't opposed the Bush Administration on that issue back in 2001, we would have ANWR coming down the pipeline by now - or very nearly. It's as if we built out ANWR oil - but the Democrats bombed the pipeline and the wells.
Declare war on Democrats!
airbust will be bankrupt soon, no merger let that dog die out.
Short-term vision. These new fuel-efficient planes are exactly what the industry needs to stay afloat in the age of high fuel prices. The 787 alone is at least 20% more fuel efficient than what it’s replacing.
“airbust will be bankrupt soon, no merger let that dog die out.”
Airbus will never go bankrupt. It’s a source of pride for Europeans, and they’ll always subsidize it.
Lots of airlines have already ordered enough 787's to replace their 767's. This article is saying that a large part of the orders are for fleet growth rather than replacement of existing aircraft. If fuel prices remain high, air fares will have to remain high and will dampen demand for airline growth. Without airline growht, the number of 787's needed decreases.
Which could be a good thing for Boeing, as the number of penalty payments decreases if the airlines voluntarily defer or cancel orders.
Most of the 787 orders, however, are for international airlines, not domestics. You will note that in this story, it is the 737 and A320 orders being cancelled, not 777, 787, A330, and A380 orders.
I'm glad someone made this point. I've made it myself on another forum.
Most of the 787 orders, however, are for international airlines, not domestics. You will note that in this story, it is the 737 and A320 orders being cancelled, not 777, 787, A330, and A380 orders.
Except for American Airlines which wants to replace MD-80's with 737NG's. They should be helped by the number of deferred orders by other airlines for 737's.
Mr Obama, what are you doing on FR?
Drilling in the U.S. will only decrease the rate of which the price of oil increases.
WASHINGTON (Reuters) - Allowing oil drilling in U.S. offshore waters that are now closed to energy exploration would do little to lower gasoline prices paid by consumers, the government’s top energy forecaster said on Wednesday.
http://uk.reuters.com/article/oilRpt/idUKN2546114820080625
You may be on to something....
Well, if a gov’t hack and Reuters says supply and demand is dead, who am I to disagree?
There is a twist to this. Newer planes are much more fuel efficient than older planes. Better powerplants and wing designs.
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