Boeing and Airbus turn to Asian customers to boost order book
Updated
This week the skies above Singapore have been more crowded than usual as the world's aircraft manufacturers drum-up business at one of the industry biggest gatherings. Just a few years ago Boeing and Airbus left the event with more than 60 billion dollars in their order books, but after a year of massive losses the industry is re-grouping and its hoped Asia will provide the impetus for growth.
Presenter: Scott Alle
Speakers: Jimmy Lau, Singapore Air Show Managing Director; Randy Tinseth, Boeing's Vice President of Marketing; Mark Howes, Asia-pacific President of Honeywell
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ALLE: A Lockheed Martin f-16 fighter goes through its paces at the Singapore Air Show. It's been a success story for the giant American corporation, and could be one of the few aircraft to attract orders at what is Asia's biggest showcases of aviation technology. But few if any sales are anticipated at the event which wraps up this weekend. The commercial airline industry hit severe turbulence in 2009, passenger traffic dropped by 3 and-a-half per cent from a year earlier, while freight traffic dived 10 per cent. Jimmy Lau the show's managing director says there's been some positive signs of recovery.
LAU: The mood has been upbeat actually although they are very very cautious beginning of the year i think everyone is seeing what the trend might be the mood generally for last three days has been very upbeat
ALLE: In the refined atmosphere of the Boeing pavillon there's no need for sales hype. After all, the Seattle based aircraft maker has a reported backlog of nearly three-and-a-half thousand planes worth 250 billion US dollars. And its unclear just how many ordered by struggling legacy carriers like Japan Airlines will make it to the tarmac. Boeing's vice president of marketing, Randy Tinseth, is acutely aware low cost carriers represent the best source of growth.
TINSETH: Since the year 2000 we've seen low cost carriers consistently grow in markets..we've seen those airlines consistently being profitable through this down cycle we've seen those airlines grow and as we look at the next 20 years we see low cost carriers growing faster than the network carriers.
ALLE: Boeing is also banking on sustained expansion of the Chinese aviation market. Air China alone expects to order 400 planes in the next 4 to five years. Jimmy Lau, who oversees the show's operations.. says a forum on China also highlighted China's drive to produce its own passenger jets to compete with the big names from the US and Europe.
LAU: Chinese commercial market is going to be very very huge. And I think China and Comac are going to make sure their commercial jets are going to make a big impact not just domestically you know but on the world stage
ALLE: While the talk of a recovery is encouraging, recent mixed earnings results from US carriers have indicated the outlook is still uncertain. Mark Howes, Asia-pacific president of component manufacturer Honeywell which signed 120 million dollars in contracts at the show, isn't expecting a quick rebound.
HOWES: We'll see a relatively slow recovery that will occur over time. Much deeper reduction was experienced in the aviation segment and i don't think it will be until 2012 or 2013 that we'll be able to look and see that we're substancially improved
ALLE: Passenger traffic in Asia is projected to grow an average 6 per cent annually over the next 20 years. But hurdles such outdated infrastructure and regional de-regulation of the industry will need to be addressed along the way.
