Airbus' orders not as big this year
Airbus warned that it's likely to sell only half as many planes this year as it did in 2007. Scott Jagow talks to European correspondent Stephen Beard about how the value of the euro is affecting Airbus' bottom line.
Airbus logo on one of its models (Getty Images)
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TEXT OF INTERVIEW
Scott Jagow: European plane maker Airbus warned today that 2008 will be half as good as 2007 -- well, in terms of new orders for planes. Airbus said it's likely to sell 700 planes this year compared to 1,400 last year.
We're joined by our European correspondent, Stephen Beard, in London. Stephen, I guess the most obvious question is, why?
Stephen Beard: Well, Airbus says this is really a reflection of how good things were last year. I mean, it was a record year -- Airbus and Boeing between them took orders for 2,750 new planes, a lot of the demand coming from emerging markets. Industry analysts say both Boeing and Airbus will see a decline in new orders.
Jagow: We've heard about problems with Airbus for months now about the exchange issue, the euro versus the dollar. That has to be playing a part, doesn't it?
Beard: It's affecting Airbus' bottom line. Airbus has a huge disadvantage, compared with its old rival, Boeing, at the moment, and that is that Airbus' costs are in euros, which have been going up in value. But this really just affects its bottom line. In terms of orders, the two companies are more or less on level pegging.
Jagow: But on the whole, we hear about big orders, like aircraft orders, being key economic figure. So how, what might this suggest about the overall global economy?
Beard: Well, aircraft industry analysts say it doesn't really say too much at this stage. And a point that is worth making is that both Boeing and Airbus have more than enough work to keep them going. Airbus has a backlog of something like 3,400 aircraft to build -- that's gonna keep Airbus going for at least six years.
Jagow: All right, Stephen Beard in London. Thank you.
Beard: OK, Scott.
