Rising Fuel Prices, Credit Costs To Blame

Airbus now forecasts new airliner orders will fall to 750 planes in 2008, the lowest level in four years, because of rising fuel and credit costs.

Bloomberg attributes the prediction to Chief Operating Officer John Leahy, who says orders will almost certainly drop from a record 1,341 set last year. The world's largest planemaker's sales will be about half of 2007 levels.

Jet fuel costs represent an average of 28 percent of airline operating expenses, and they rose 16 percent just in the past quarter, while the International Monetary Fund estimates losses stemming from the US mortgage crisis may approach a trillion dollars.

EADS, owner of Airbus, last month reported its first annual loss in five years on cost overruns for military transport planes and the 525-seat A380 superjumbo.

So far, the predicted slump in orders hasn't affected Airbus rival Boeing -- which reported last week its orders actually increased in the first quarter of 2008, over the same period in 2007. As ANN reported, the planemaker went on to report a staggering 1,413 net orders for last year... but few, if any, within the industry expect the American planemaker' orders to come close to that figure for 2008.

FMI: www.airbus.com