Boeing launches attack on Airbus

JET manufacturing giant Boeing has delivered a withering attack on its arch-rival Airbus, accusing the European group of making too many aircraft, causing a worldwide glut and stalling an aviation-industry recovery.

Stung by confirmation that it had been bested by Airbus for the first time in production volumes last year, the American group's official spokesman in Europe said Airbus is over-producing and thereby destroying the value of existing airline fleets around the world.

Airbus is likely to beat Boeing again in 2004 as it continues to churn out A320s, the single-aisle, mid-market aircraft that typically carry about 150 passengers and are pitched directly against the Boeing 737, used by major budget airlines.

But the Boeing spokesman said: 'Oversupply by Airbus is damaging the value of their aircraft. Whereas Boeing has cut production, including that of the 737 Next Generation, Airbus has maintained production, creating a glut of A320s on the world market.

'The value of Airbus in-service fleets has dropped and lease rates have plummeted. Every unneeded plane produced in a downturn destroys value and delays the recovery. We made a conscious decision to match capacity to demand to help our customers address the serious oversupply situation in the industry.'

The bankruptcy of various Airbus client airlines, says Boeing, has not helped, leading to 90 A320 aircraft being parked, redundant. Boeing claims A320 lease rates have dived by more than 30% to less than $200,000 (£110,000) a month for a new one, and $120,000 for a recently produced, used jet. In contrast it says its 737s are retaining their value, being leased for nearer $300,000 a month.

Airbus delivered more than 300 aircraft last year, three-quarters of which were in the A320 family of aircraft. It reckons it will hit similar numbers in 2004. In 2003 Boeing deliveries fell by 26% to 281 - nearly two-thirds of which were 737s - and it is forecasting between 275 and 290 this year.

Boeing spent much of 2003 on the back foot, culminating in the resignations of its chief Phil Condit and top finance man Mike Sears over a US government procurement scandal.

A spokesman for Airbus said: 'We have kept a steady production flow in accordance with demand from our customers.'