Company Still Has Plenty Of Orders To Fill

The world's largest maker of jet engines says the air travel slump and fewer orders for new aircraft will cut its orders by 50 percent in the coming year. Jack Lutze, vice-president of sales for Europe and Africa, told Reuters on Tuesday some deferrals were likely for next year's deliveries but only a few cancellations, a sign that more airlines are likely to postpone plane buying in the downturn. "Everybody is looking to push back 2010," Lutze told Reuters on the sidelines of the International Air Transport Association's (IATA) annual meeting in Kuala Lumpur.

Still, Lutze said, the company has a large backlog of orders worth years of production after airlines went on a buying spree and ordered over $500 billion in new planes earlier this decade. But this year, the deepening financial crises, weak passenger loads for pleasure and business, a falling air cargo trade and difficulty finding financing have all hit airlines hard, and many are considering delaying orders for new aircraft. Volatile oil prices have only worsened the problem.

GE Aviation, which makes engines for plane makers such as Airbus and Boeing said in January it planned to reduce its white-collar staff by more than 1,000 people this year, but did not plan to trim its manufacturing workforce. The company has 16,000 salaried employees. GE management said most of the reductions would through attrition, retirement, buyout packages, though some layoffs were expected. Fellow engine maker Pratt & Whitney, is also shedding 1,000 jobs.

The mood at the IATA meeting has been fairly grim, with the association saying industry losses could top $9 billion this year, nearly double a forecast made just three months ago. Many airline CEOs at the event told Reuters this was the toughest environment they had faced.

FMI: http://www.geae.com/