Boeing has forecast that the attacks on the USA will result in at least a 5% fall in worldwide annual passenger traffic "if we're lucky", according to Boeing vice-president marketing Randy Baseler - far more serious than the 3% drop during the 1991 Gulf War.
Certain markets, such as the US domestic sector, have already suffered a 20% traffic fall since the attacks. Baseler predicts that next year's order intake "will be bad", and that any recovery in grow this unlikely before 2003. But he expects cancellations to be minimised by customers deferring orders instead.
Mike Sears, Boeing's chief financial officer, also predicts tough times, but claims that the company's defence and space operations would help pull it through.
Speaking at a Goldman Sachs analysts' conference last week, Sears forecast that Boeing will deliver only 350-400 aircraft in 2002 compared with 522 this year. Although the company will remain in profit, the 30,000 redundancies already announced will not be the last, with more due early next year.
Airline services have also been affected, and Sears acknowledged airborne congestion will no longer drive demand for air traffic control services. Demand for airborne broadband communication has also fallen, leaving governments as the most important buyers for Boeing's Connexion services.
Overall, the company's turnover will be $58 billion this year and $55 billion in 2002, rather less than earlier predictions of $62 billion for 2002. Operating margins will also fall from 9.75%to 8.25%.
Since acquiring Hughes Space, McDonnell Douglas and the space and defence activities of Rockwell, Boeing has expanded into the defence and space sectors, and sales in these areas should keep the firm profitable. However, losing to Lockheed Martin on the Joint Strike Fighter will mean $1 billion less revenue in 2002 alone.
Space division profits have been hit by high research spending on programmes such as the Delta IV launcher, the National Missile Defense system and National Reconnaissance Office spy satellites, but this should change in 2002.
Source: Flight International
