Singapore Air Show, Airlines, And The Credit Crisis

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With more than $100 billion in orders booked at the Dubai air show last year, there were no signs of recession in the business jet market, but Singapore's Air Show may tell a different tale for the airline industry. Early figures from the February 19-22 Singapore Air Show list orders at just over $10 billion -- much lower than Dubai and significantly lower than analysts predictions of $15-$20 billion. With the Asian airline industry forecasted to boom, the discrepancy has analysts searching for answers. Some are blaming the credit crisis, suggesting the global economy's impact on travel, or the airlines' difficulty in financing aircraft, may be forcing airlines to tie up more equity in aircraft purchases and to adapt their financial strategies. Those factors may lead to a lull in purchases. Other factors affecting the slower-than-expected buying frenzy may include uncertainty in China and the United States, where potential airline consolidations complicate aircraft purchase plans.

But in Asia an airliner buying spree has capacity set to expand by 8.8 percent in 2008, while demand is expected to rise by only 6.4 percent, according to The Economic Times. In the end, Airbus said last week it expects orders for its aircraft this year to fall from last year's record of 1,341, landing this year closer to 700. Boeing does not give forecasts but expects plane orders from Asia Pacific, alone, to top 8,300 in the next two decades.