PARIS 2009: CFM reports deferrals rather than cancellations
CFM has only had four engine orders cancelled in 2009, reported president and CEO, Eric Bachelet, at the company’s Paris Air Show press conference.
Explaining why there have been so few cancellations and much more deferrals, Bachelet commented, “In previous downturns, one reason why the stream of deliveries decreased faster was that the market was more focussed on the US and Europe. Now it’s a global thing and that gives airframers the chance to shuffle their deliveries around.”
“Airbus and Boeing actually entered the crisis with overbookings, so they’ve been able to use that to keep deliveries up,” interjected Olivier Savin, CFM executive vice-president.
The production level for CFM in 2009 is likely to be similar to that in 2008 at just over 1,200. “This is consistent with the few cancellations there have been. Our 2009 deliveries are pretty much locked and we’re confident about the early part of 2010. But beyond mid-2010, there is much less visibility as to how deliveries will progress,” Bachelet acknowledged.
Following the boom year of around 2,700 orders in 2007 plus more than 2,000 orders in 2008, CFM had received only 303 orders in 2009 up to the end of May, said Bachelet. “Although the figures may not seem to add up, with Boeing reporting a net zero on orders since the start of the year and Airbus only about 20, it should be remembered that many airlines placing orders in 2007 did not make an engine choice, so there is nothing to come off our orderbook for those,” he explained. “Also around 10% of orders are for spare engines.”
Bachelet would not predict how many orders CFM expects to receive in 2009, but admitted, “We would be happy with 600.”
The CEO also noted that the spare parts demand has remained about the same as last year. “Normally we would expect it to grow, with so many engines getting older,” he stated. “But this shows how much less utilisation there is by airlines of the aircraft, and therefore the engines.”
Bernie Baldwin, editor, Low-Fare & Regional Airlines/LARAnews.net