Boeing, Airbus Delays Aid Battered Carriers

Airlines already well under capacity as passenger numbers fall
By Jim O'Neill,  Newser User
Posted Jun 2, 2008 8:32 AM CDT
A Boeing employee works in the cargo area of the first Boeing 787 as it stands near completion at the front of the assembly line, Monday, May 19, 2008, in Everett, Wash.   (AP Photo/Elaine Thompson)
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(Newser) – Airlines battling rising fuel costs and weakening demand have become unexpected beneficiaries of production delays on the Boeing 787 Dreamliner and Airbus A380 jumbo jets, reports the Wall Street Journal. "For the industry, it's great,” says the chair of Air Canada’s parent company, "because it means less capacity." The carrier has 37 Dreamliners on order.

The delivery delays keep demand for seats higher and let airlines boost prices. Capacity also is filling up, say experts, as airlines get rid of older, less fuel-efficient planes at a pace double that of last year's retirement rate. Fuel costs now eat up 40% of carriers’ operating costs, up from 15% in 2002. Once they're online, both the 787 and A380 will deliver improved fuel efficiency.