Boeing 787 delays give edge to rival Airbus

By Dow Jones Newswires
Posted Nov. 18, 2010 at 4:26 p.m.

Aircraft manufacturer Boeing Co.’s delays in readying its new 787 Dreamliner jumbo jet for delivery have been giving competitors an advantage, an executive for rival Airbus said Thursday.

“It’s true that all the delays with the 787 have helped us,” Airbus Senior Vice President for Latin America Rafael Alonso told reporters on the sidelines of an airline forum, noting the Airbus A330 as the main beneficiary. “In the case of the 787, we think their problems aren’t resolved yet, we don’t know how it’s going to continue developing.”

The 787, scheduled to be delivered in 2011, could help Boeing compete with the A330/A340 family of aircraft produced by Airbus, a unit of European Aeronautic Defence and Space Company.

But the new airliner has been beset by cost overruns and schedule delays, as well as concerns that U.S. safety regulators could require other aircraft to maintain especially long distances behind 787s during landing approaches. Boeing suspended test flights of the 787 last week after an electrical fire broke out aboard a test plane, and on Tuesday the company said it hadn’t yet reached a decision on when flight testing will resume.

Van Rex Gallard, Boeing’s vice president of sales for Latin America, Africa and the Caribbean, said the 787’s delays have probably helped Airbus, just as Airbus troubles give Boeing an advantage.

Alonso said recent airline mergers in Latin America have improved the prospects for joint orders for aircraft.

“Now, undoubtedly, the associations and unions of companies that we’re seeing put them in a strong, robust situation to sit down and make additional orders with the manufacturers,” he said.

This year, Latin America’s two largest carriers–Chile’s LAN Airlines and Brazilian leader TAM — agreed to exchange shares to create a regional giant, while Colombia’s largest airline, Avianca, merged with El Salvador’s Grupo TACA. Panama’s Copa Holdings joined Star Alliance, which will also add Avianca-TACA.

Gallard said mergers should have a favorable impact on aircraft sales, “because now there’s a more rationalized demand for equipment.”

“If you become one entity, then you order planes combined,” Gallard said. “I can see in the case of LAN and TAM having requirements for more airplanes, bigger airplanes. It’s a positive outcome.”

On the other hand, joint orders from alliance partners isn’t realistic because of different requirements for all the different airlines. “It would be way too difficult for us to be able to do the right thing for everyone,” he added.

Airbus estimates the Latin American market will require nearly 1,700 new jet aircraft over the next 20 years. Boeing’s estimate is higher, at 2,180.

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