Airbus SAS is on track to overtake Boeing in '03

European plane maker built market share in '02

January 12, 2003|By BLOOMBERG NEWS

TOULOUSE, France - Airbus SAS, the world's second-largest maker of commercial aircraft, delivered 303 planes to customers last year, topping its target and gaining market share on Boeing Co., people familiar with the company said.

The Toulouse-based plane maker also aims to hand over 300 planes this year, which would exceed the total expected by Chicago rival Boeing by as many as 25 planes. Airbus's proportion of large commercial aircraft deliveries rose to 44 percent in 2002 from 38 percent in 2001.

"This confirms my confidence that they can stick to their promises," said Klaus Breil, who helps manage $5.9 billion in stock at Adig Investments in Frankfurt, Germany, including 1 million shares in Airbus parent European Aeronautic, Defense & Space Co.

Airbus' battle with Boeing for market share intensified as airlines canceled or postponed purchases of new planes after a decline in demand for air travel after the Sept. 11 attacks. U.S. carriers had an estimated combined loss of $9 billion in 2002. Both U.S. Airways Group Inc. and UAL Corp. filed for Chapter 11 bankruptcy protection last year.

Airbus Fridat won an order for its newest plane, the 550-seat super jumbo A380. Malaysian Airline System said it will buy six A380s worth as much as $1.5 billion, making it the 10th company to order the plane, which breaks Boeing Co.'s monopoly in the market for planes seating more than 400 people. The A380 will be the world's biggest passenger plane when it begins service in 2006.

An Airbus spokeswoman declined to comment on the delivery figure, saying an announcement will come Tuesday. Boeings deliveries in 2002 were down 28 percent from 2001, while Airbus's dropped 7 percent.

Airbus's 44 percent of total commercial plane deliveries in 2002 is a big increase from 10 years ago when the European maker delivered 26 percent of all big commercial planes. In 1992 Airbus delivered 157 planes compared with 446 for Boeing.

In 2002, many planes that had been scheduled for delivery earlier were pushed back until 2004 and beyond by airlines that have been cutting capacity. Before the terrorist attacks in the United States, Airbus had been expecting to deliver more than 400 planes.

UAL's United Airlines restructured some aircraft deliveries from both Boeing and Airbus, leaving it with no scheduled aircraft deliveries for 2003. As of mid-December, Airbus expected to deliver 24 planes to United in 2004 and 18 in 2005.

Airbus' ability to push through 303 deliveries means the manufacturer didn't get stuck with the planes at the end of the year because airlines in financial difficulty couldn't take delivery.

"They have removed potentially burdensome inventory from the balance sheet and should be financially strong at year-end," said Will Mackie, an analyst at Commerzbank who has a "buy" rating on EADS shares.

Among the last planes Airbus delivered in 2002 was an A330-200 to Australia that set a milestone on its delivery flight. The twin-engine aircraft flew nonstop a distance of almost 10,557 miles from Toulouse to Melbourne, beating the current record of 11,248 kilometers on a Toulouse to Santiago, Chile, flight in 1998.

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