Jul 26, 2011
Demand for new jets soars
Airbus secures bulk of aircraft orders so far this year
By Karamjit Kaur, Aviation Correspondent
NEW jets are selling at a furious pace so far this year, thanks to a strong global aviation market and positive industry sentiment.
In the past six months, aircraft makers Airbus and Boeing have secured orders for more than 790 jets, compared with just 268 for the same January-June period last year. At the year's half-way mark, the order tally is already more than 70 per cent of last year's total of 1,104 aircraft.
Industry analysts expect the momentum to continue in the second half of the year with much of the demand for new jets, among Asian carriers especially, expected to cater to growth instead of aircraft replacement.
For consumers, this means more flights and destinations which will in turn spur more competition among airlines and possibly lower fares, they said.
A major driver of growth in the Asia-Pacific is the low-cost carrier segment, said Mr Brendan Sobie, a Singapore-based analyst for aviation think-tank Centre for Asia-Pacific Aviation.
At last month's Paris Air Show, Malaysian budget airline AirAsia announced an order for 200 Airbus 320neo aircraft while India's IndiGo signed for 180 A-320 and A-320neo planes.
Mr Sobie said: 'Within Asia, full-service carriers are now in a position where ceding more market share to low-cost carriers is inevitable.
'It is possible that low-cost carriers could even control 50 per cent of capacity within Asia (up from about 20 per cent currently) sometime in the next decade.'
Apart from AirAsia and and IndiGo, Singapore's Tiger Airways and Jetstar have also announced expansion plans.
Growth will come from other markets too, said Mr Jonathan Galaviz, chief economist at research and consulting firm Galaviz & Company.
He said: 'Growth in tourism will continue to drive the growth of airlines in all segments, from budget carriers to legacy carriers.'
Just last week, American Airlines' parent company announced what it called the 'largest aircraft order in aviation history' - 460 narrow-body Boeing and Airbus jets to be delivered between 2013 and 2022.
Airbus' success at the Paris Air Show has put it firmly in the lead, ahead of its American rival Boeing, in the numbers race.
From January to last month, the European planemaker secured 640 net aircraft orders, compared to just 151 for Boeing (as of June 28).
Airbus also delivered more aircraft during that period; 258 compared to Boeing's 222.
The second half of the year should be better for Boeing which plans to launch its re-engineered B-737 in the coming months, said Mr Sobie.
Mr Shukor Yusof from Standard & Poor's Equity Research was less optimistic.
He said: 'At this stage, Boeing's a bit late into the game and gives the impression that it is either lacking in ideas or in a sales person with John Leahy's (Airbus' chief salesman) qualities or both.'
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