Delayed jets set to fly, pledge Boeing and Airbus

DUBAI (Reuters) - Boeing and Airbus, hurt by delays in new models, are vowing to get the overdue 787 Dreamliner and A400M military transport plane into the air by year end.

The maiden flights would offer a welcome boost for the world's top two planemakers, which are grappling with sluggish demand in the wake of the financial crisis, as seen at this week's Dubai air show.

"I am confident that we will have a first flight by the end of the year," Airbus Chief Executive Tom Enders told Reuters Television.

Airbus parent EADS reported a 77 percent drop in third-quarter core earnings on Monday, hit by the delay of the A400M, softer airliner demand and the adverse effect of a weak dollar.

Enders also said production on the A380 superjumbo was still slower than hoped for.

"There is no secret about it. We are still having production hiccups. Production is not where we want to it to be," he said.

The Dubai air show showcases a Gulf region that has helped offset slowdowns in North America and Europe and led demand for planes including the A380.

"The Middle East market encompasses all aircraft segments and is a barometer for the rest of the world," said John Leahy, Airbus' chief operating officer. "The recovery begins here."

Emirates and other carriers in the region are still shopping, but business is slower than recent years.

Chairman Sheikh Ahmed bin Saeed Al-Maktoum told reporters at the event that Emirates was in talks with Boeing and Airbus to buy "tens of planes" as the airline prepares for the global recovery.

"There won't be anything at the air show (but) we are talking to Boeing and Airbus," he said. "It would be in the 10s of planes ... I think we can say 777s (from Boeing) and could be A330s on the Airbus side."

Emirates is still in discussion with Airbus about a letter of intent for 60 planes, Sheikh Ahmed said.

The Arab world's largest airline has $55 billion of orders with the two manufacturers and said last week it might take over orders its rivals are shelving.

Like Airbus, Boeing sees the Gulf and Middle East region as well as China and India playing a bigger role in future plane buying.

Boeing expects airlines to return to profit in 2011 underpinned by a recovery in global economic growth and passenger traffic next year.

DELAYS

The U.S. planemaker has hefty back orders for the 787, but delays in its maiden flight have tarnished the reputation of its fastest selling airliner.

Boeing Commercial Airplanes Chief Executive Jim Albaugh on Sunday reaffirmed Boeing's goal of flying the 787 Dreamliner by end-year, but declined to say what if any risk there was of a further delay.

"We are going to fly this plane when it is ready and safe and when we know it will be a successful flight. Right now based on everything we know it should fly this year," he said.

Anxious investors punished Boeing in June after its most recent delay in the 787, sending its shares down 6 percent on the day.

The 787 breaks new ground in its extensive use of lightweight composites while Airbus' A400M will reduce Europe's reliance on U.S.-built military transport planes.

The 787 is central to Boeing's battle back against Airbus in airliners while the European company has pinned hopes for a bigger slice of the military market on the 20-billion-euro ($29.92 billion) A400M project.

Countries which have ordered the delayed A400M will meet in Berlin on Thursday to discuss the delayed programme, the German Defense Ministry said.

Another key defense programme in the spotlight in Dubai is the United Arab Emirates and its talks with France's Dassault Aviation to buy Rafale combat jets.

Analysts say the United States has not given up on grabbing a deal and that may explain the surprise showing of the world's most advanced fighter, the Lockheed Martin F-22 Raptor.

The Raptor is not on sale abroad but its flying display including a series of eye-popping stunts was seen as a reminder for buyers of other U.S. hardware of its military reach.

(Writing by Amran Abocar and Jason Neely; Additional reporting by Tamara Walid and John Irish in Dubai, Gernot Heller in Berlin, Maria Sheahan in Frankfurt, Helen Massy-Beresford and Matthias Blamont in Paris; Editing by Jon Loades-Carter)

($1=.6685 Euro)