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Planemakers shrug off economy clouds

Monday, July 11, 2016 - 02:04

Airbus and Boeing have raised their long-term forecasts for new aircraft demand, betting that rising wealth in Asia would continue to boost air travel and offset any short-term hits to the global economy. As Ivor Bennett reports, the world's two biggest planemakers also announced a flurry of multi-billion dollar jet deals at the biennial Farnborough Airshow in England.

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To say the clouds had been gathering before this year's Farnborough air show would be an understatement. But in the end it wasn't the metaphorical storm that was the problem Forget Brexit, forget the Chinese slowdown, it was the rain. (SOUNDBITE) (English) REUTERS REPORTER, IVOR BENNETT, SAYING: "The rain has eased off now but the damage has been done. Large parts of the site have lost power. So instead of hawking their wares and shopping for deals in there, everyone is heading in the other direction, to the exit, after being told they had to evacuate." There was a chance for some flying before the downpour. And some business Airbus announcing a deal to sell 12 of A350s to Virgin Atlantic Who are pressing ahead with their fleet renewal despite the recent turmoil (SOUNDBITE) (English) CRAIG KREEGER, CEO, VIRGIN ATLANTIC, SAYING: "We obviously don't like a weak sterling. And in the end, how that affects demand for travel could certainly be a challenge. But I'm pretty confident, I'm very confident, regardless of that we've positioned the company to ride our way through this." Planemakers are similarly bullish. Both Airbus and Boeing raising their longterm forecasts The latter predicting passenger numbers will increase by nearly 5 percent a year in the next two decades Even if the immediate outlook is somewhat hazy. (SOUNDBITE) (English) RANDY TINSETH, VICE PRESIDENT MARKETING, BOEING, SAYING: "You know, when we take a look at Brexit, clearly it's caused a lot of turmoil in the market place. What we're watching is; what will it do to trade? I think there are more questions than answers right now." For analysts too But their concern is the backlog of orders Which stood 13,500 at the end of last year. (SOUNDBITE) (English) RICHARD ABOULAFIA, TEAL GROUP PRESIDENT, SAYING: "The temptation is to make hay while the sun shines, get planes out the door, bring in revenue, keep up with the ramp. But of course there's an awful lot to be said of throttling back now, letting things level out, and not produce a self-induced downturn by overproducing. So I think they've got to walk a really fine line." For now though, the only line anyone is following is the one to the exit. An awkward symbolism perhaps on the day Prime Minister David Cameron declared Britain was still open for business.