Analysts, However, Are Not So Sure

Major orders for both Boeing and Airbus at the top of the Farnborough Air Show are indications of a strong economic recovery, right? That is the opinion of the leadership for the two rival plane makers, but analysts say it's not a sure thing.

On the opening day at Farnborough, Boeing said it had taken orders for 30 of its 777-300ER jets from Emirates Airline,40 Next Generation 737s from GE Capital Aviation Services, three Dreamliners, and 27 additional aircraft, while Airbus touted orders for 121 planes from a variety of customers on the opening day of the show, some of those also from GE and other leasing firms. "The market is clearly coming back and I feel very confident about how we are positioned to regain -- and retain -- leadership in this business," said Boeing commercial aircraft division chief James Albaugh. "Financing has stabilized. There is a lot of pent-up demand."

And airlines are feeling a change in the wind. The New York Times reports that the IATA forecasts a global airline profit of $2.5 billion in 2010, which follows losses of $9.9 billion in 2009 and $16 billion in 2008.

But industry analysts are not as bullish on the recovery. Richard L. Aboulafia from the Virginia-based Teal Group told the paper that, in terms of the broader economy, "things are very uncertain." He said trade demand was indeed showing a strong recovery, but that was not showing up across the board.

Many of the orders at Franborough are for single-aisle short-haul jetliners that airlines are buying to replace aging fleets, and Aboulafia says that part of the market is the "most flexible" in terms of marketing.

While they agree that Boeing and Airbus are announcing orders for a lot of airplanes, analysts say they do not expect sales to reach pre-recession levels in the foreseeable future. But Monday's announcements are already flight levels above the deals rolled out at the Paris Airshow last year.

FMI: www.boeing.com, www.airbus.com