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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
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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.

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.
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)
Airbus CEO Thomas Enders speaks in front of an Airbus A380 plane during the opening ceremony of the International Air Show ILA in Berlin on Tuesday, May 27, 2008.
Airbus CEO Thomas Enders speaks in front of an Airbus A380 plane during the opening ceremony of the International Air Show ILA in Berlin on Tuesday, May 27, 2008.   (AP Photo/Markus Schreiber)
In this Sept. 4, 2006 file photo, an Airbus superjumbo A380 takes off with 474 passengers aboard, all Airbus employees, on its first long-distance test flight with passengers.
In this Sept. 4, 2006 file photo, an Airbus superjumbo A380 takes off with 474 passengers aboard, all Airbus employees, on its first long-distance test flight with passengers.   (AP Photo)
Boeing 787 jets are lined-up nose to tail and surrounded by rows of workers on computers and at work stations as the planes are put together on the assembly line, Monday, May 19, 2008, in Everett, Wash.
Boeing 787 jets are lined-up nose to tail and surrounded by rows of workers on computers and at work stations as the planes are put together on the assembly line, Monday, May 19, 2008, in Everett, Wash.   (AP Photo/Elaine Thompson)
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Airline industry stands to lose $6.1 billion
Guardian (UK)

Air travel hassles costs industry passengers
MarketWatch

 
Boeing • airline industry • Airbus • Airbus A380 • Boeing 787 Dreamliner • delay • fuel costs

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