Airbus chief upbeat despite decline in orders

One of the world’s largest aircraft companies said today it had enjoyed a “very good year”, despite orders being down by around 500 planes from last year.

Airbus, whose revenues were more than €25bn in 2007, said it expected to finish the year with 800 global orders, but with a healthy order backlog of 3,700.

Speaking at the company’s UK headquarters in Filton, Bristol, Tom Williams, executive vice president for programmes and customer support said the drop from around 1,341 net orders last year was expected.

He said today: “This is a cyclical industry. We are not deluding ourselves and we had expected this year to be slower.

“If you look at those record order years, we thought we couldn’t keep going at this rate. The backlog had grown to such a point where it almost discourages customers from placing orders.

“We did expect this year to go down.”

The customer base had a good 'geographic balance', spreading the risk through the Far East, the Middle East and Europe, he said. Nor is the company dependent on the American market.

Earlier in a media briefing Mr Williams said the company, famous for building the world largest passenger aircraft, the A380, said: “In terms of the overall business situation, clearly we are going into a situation that is, shall we say, interesting or perhaps challenging. We still hope to finish this year with 800 orders. That’s a very good year.

“Some people might say its not as good as the previous year (around 1,341 orders), but we still think its pretty impressive.”

The company still has a “significant backlog” of 3,700 aircraft orders – but some of those could end up being put back or deferred by customers.

He added: “We have to be realistic. It’s not like everyone would take every single aeroplane. It might take five years or even longer to deliver these aircraft.

“At the moment the problem is more likely to be one of financing. We’ve seen some signs where customers who were enthusiastic to take planes have been going to banks and finding it has become more difficult to draw down the financing that’s been committed.”

He added: “We are sitting on a very strong cash position. We do have some flexibility to manoeuvre and help customers with financing.”

Cheap fuel was not guaranteed good news for aircraft industry, Mr Williams revealed.

He said: “A reduction in fuel prices may be a double edged sword because people may hold onto older aircraft for longer.”

The company plans to be making 36 aircraft a month in December. Another positive was that planes were often more attractive investment than other prospects like shopping malls, because of their adaptability to different situations.

Mr Williams explained: “The beauty of a plane is that it can be redesigned to different markets and applications, with a lot of flexibility.

“The key message will be that we will have to do more financing ourselves and we will be looking for export credit agencies to help us with key customers.”

In September it was announced the engineering firm GKN was buying part of the Filton site for £136bn (€160m).

Mr Williams added that Airbus employees should have no current fears for their jobs, as “peaks and troughs” were “normal” in the industry.

He said: “We are comfortable with the job numbers. We don’t see any major issues as long as the build stays the way it is.”