Home »Business and Economy » World » Boeing warily eyes idle but viable airliners

  • News Desk
  • Feb 27th, 2004
  • Comments Off on Boeing warily eyes idle but viable airliners
US aerospace group Boeing Co reckons enough commercial aircraft are idle to displace almost a year of sales by itself and European rival Airbus SAS, with prices for new planes continuing to suffer as a result.

Two-and-a-half years after the September 11, 2001, attacks sent squadrons of jetliners into storage at desert airfields, Boeing thought about 750 were modern enough to return to service, said Vice President of Marketing Randy Baseler.

And their availability was still suppressing prices for new aircraft, he told Reuters at the Singapore air show.

"There is no question that they compete," he said. "There is no question that they hold down prices."

Analysts say the number of idle commercial jets has been stable near 2,000 since soon after the September 11 attacks, although many of them are too old and inefficient to return to service.

Of the 750 modern ones, about 250 could be counted as a normal idle fleet, planes parked for a while in the ordinary course of business in the airline industry, Baseler said.

That left a population of about 500 truly surplus.

"What will happen is that it will probably come down slowly," Baseler said. "It will slowly be absorbed over the next two or three years."

Airlines could conceivably do without almost a year's production from Boeing and Airbus, which together delivered 586 commercial jets in 2003, if they could take the available planes back into service immediately.

They cannot do that, however, because not all planes are alike.

While airlines can cheaply rent or buy unemployed aircraft, they often prefer to buy new ones, paying extra so they can have interiors, equipment and engines that match their other planes.

Even so, an airline will demand keener prices from Airbus and Boeing if it thinks it could make do with second-hand jets, hence the downward pressure on prices of new aircraft from the idle fleet.

Baseler's calculations counted planes as modern if they were of a type or sub-type that entered service after 1980.

For example, it included the McDonnell Douglas MD-80 series, a narrow-body twin jet that dates from 1980, but not the earlier DC-9 on which it was based.

"We don't think the older ones are coming back," Baseler said.

The stability in the size of the parked fleet has confounded analysts who had expected that by now it would be falling steadily, if not quickly, back towards a more normal level of around 1,000.

The airline industry has recovered more slowly than most analysts expected a few months after the attacks on New York and Washington, and requiring fewer planes because of the Iraq war and the outbreak of Severe Acute Respiratory Syndrome.

The viability of old aircraft depends a lot on oil prices and interest rates. Since oil is currently expensive and interest rates are low, there is little incentive to operate cheap old planes that burn a lot of fuel.

Airbus is 80 percent owned by European Aeronautic Defence & Space Co NV, which is based in Germany and France.

Copyright Reuters, 2004


the author

Top
Close
Close