Airbus chief brushes off downturn fears

SINGAPORE – The chief executive of Airbus said Tuesday that growth in airline passengers in Asia is likely to remain strong despite the current uncertainty about global economic growth prospects.

Speaking at the Singapore Airshow, Fabrice Bregier said that Airbus and its competitors are not facing a downturn in orders from airlines. Stock markets and oil have slumped since the beginning of the year, in a sign of investor anxiety about the health of the world economy.

“I think it is simple and it is clear that there are tensions around the world. And so people try to project themselves into the future and impact on air traffic,” he said. “As a matter of fact, we don’t see it, our competitors don’t see it, our customers don’t see it. We’ve never been so healthy.”

The company forecasts demand for 12,810 new airplanes in the Asia-Pacific area, valued at $2 trillion over the next 20 years. That represents 40 per cent of forecast global demand for about 32,600 airplanes over the same period.

Passenger numbers in Asia are expected by Airbus to grow by 5.6 per cent annually, with China forecast to post double digit growth.

Bregier was presenting the manufacturer’s latest outlook on the first day of the Singapore Airshow, which ends Feb. 21. More than 1,000 companies, including Airbus and Boeing are participants. The previous show in 2014 generated deals worth $32 billion.

John Leahy, an Airbus chief operating officer, said the manufacturer was not seeing any deferrals of jet orders in the region, whose middle class is driving growth in the airline industry.

“They fly for business, they have disposable income, they fly for pleasure, and they are the ones who are sitting in the seats of airliners around the world,” he said. “There’s a growing middle class in China. The middle class in Asia Pacific will be driving the world going forward.”

Airbus adjusted its 2015 numbers, saying it had 1,080 net orders compared with the previously announced 1,036. It has a backlog of 6,831 orders worth $1 trillion at list prices, though customers usually negotiate discounts.

Boeing said Monday that it had no deferrals in Asia and forecasts demand for 3,750 new airplanes in Southeast Asia alone, valued at $550 billion over the next 20 years. Of the forecast demand, 76 per cent will be for single-aisle aircraft such as the Boeing 737 and Airbus A320.