Airbus to cut output, foresees tough times

Faced with tight financial conditions Airbus may need to cut production next year as the European plane maker anticipates two 'difficult' years ahead, Airbus chief executive Tom Enders said.

"I certainly do not exclude that we will cut back production even more," Enders told the Wall Street Journal in an interview, adding, "I think we still have two difficult years ahead of us."

This year, though, the company expects to match or exceed last year's record production of 483 jetliners.

"But airlines' deteriorating financial conditions and carriers' troubles funding airplane purchases amid the credit crisis could force Airbus to throttle back," Enders said.

Last year in October, Airbus shelved plans to increase production and in February started trimming output of various models by as much as 22 per cent.

"...We're not going to stupidly pump as many aircraft as possible into the market by essentially buying our own products," Enders said.

In 2008, Airbus had forecast demand for 23,385 new passenger jets over the next 20 years. The company expects airlines world-wide to need 24,097 new planes of more than 100 seats each through 2028, the report added.

Amid cancellations and deferrals of orders by other plane manufacturer, Enders said, "What we can deliver depends on the health of our customers." Meanwhile, Airbus in a statement said the evolving airline network, emerging economies, expansion of low cost carriers and replacement of older less efficient aircrafts with more eco-efficient airlines are factors driving demand for new aircraft.

"Some 25,000 new passenger and freighter aircraft valued at $3.1 trillion will be delivered from 2009 to 2028," the statement said.

Further, the company said it expects air traffic "will remain resilient to the cyclical effects of the sector and increase by 4.7 per cent per year or double in the next 15 years."