Airlines May Delay Orders For Fuel-Efficient Airplanes.

While falling fuel prices have been something of a boon to many sectors of the economy, including airlines which have been able to use lower fuel prices to shore up profits averaging $6 per passenger, companies that build airliners are casting a wary eye on the still-sliding price of oil.

That's because analysts anticipate that airlines may delay taking delivery of hundreds of more fuel-efficient airliners ordered over the past few years, according to a report in the New York Times. Richard Aboulafia, an analyst with the Teal Group, says that low interest rates and high fuel prices made newer, more fuel-efficient airliners very attractive to airlines. But if fuel prices continue to fall, he says that airlines may hold on their existing fleets a while longer. "I think now would be an excellent time for caution," he said of the airlines.

Boeing and Airbus, the two major players in the airliner-building business, have touted fuel efficiency of their new models as they packed their order books to maintain production lines for years to come. But now, if airlines start to delay deliveries of new airplanes, those productions rates could slow.

The paper reports that the planemakers do not seem to be overly concerned. Darren Hurst, Director of market analysis for Boeing, said that airlines may decide to hold on to their planes a little longer, but "they still will need new aircraft to continue to grow." Airbus CEO Fabrice Bregier said that oil prices are impossible to predict with any accuracy, and today's lower prices could turn around at any time, so airlines would do well to go ahead and take deliveries of more fuel-efficient airplanes. He added that Airbus could absorb any decline in orders.

(Image from file)

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