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Sun 13 Nov 2011 11:26 AM

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Downturn may help reduce order backlog, Boeing says

US aircraft maker's current global backlog is worth $273bn, CEO says

Downturn may help reduce order backlog, Boeing says
Middle East currently represents around a 6% share of Boeing’s total revenue

A slowdown in the global economy is an opportunity for Boeing to reduce its backlog of orders, a senior executive at the US aircraft manufacturer said ahead of the start of the Dubai Airshow.

“At present, our backlog is $273bn and over 300 airplanes [in the Middle East]… I really do believe that over seven years of backlog is too much,” Jim Albaugh, CEO of Boeing’s commercial aircraft division, told reporters in Dubai on Saturday.

This weekend, the 2012 growth forecast across the Eurozone was reduced from 1.8 percent to 0.5 percent.

“We believe the demand for airplanes is [linked] to world GDP… If we go into a softening of the market, it is an opportunity to burn down the backlog so when we have an upswing we won’t have a seven year backlog,” he added.

Boeing executives said the Middle East region was an increasingly important focus for the Chicago-based manufacturer.

“As US defence budgets go down, we are expanding internationally and the Middle East is the most important market for us for the foreseeable future,” said Paul Oliver, regional vice president of international business development at Boeing.

This summer Boeing forecast the Middle East will account for 2,520 – or 7.5 percent – of the aircraft orders expected to 2030, with a combined value of $450bn. The region currently represents around a six percent share of Boeing’s total revenue and it aims to use the Dubai Airshow to help boost its sales in the region.

“This is an absolutely key market for Boeing Commercial. Our relations with customers are good and I think we are going to continue to see successes going forward and I think even through the course of the Airshow you are going to see some of those successes,” said Marty Bentrott, vice president of sales at Boeing Commercial Airplanes in the Middle East, Central Asia and Russia.

Dubai’s Emirates Airlines is negotiating to place an order for at least 30 and possibly as many as 50 Boeing 777 long-range aircraft worth $8.5bn to $14.5bn, while Abu Dhabi's Etihad Airways may buy an additional 12 aircraft, including 10 787 Dreamliners and two 777 jets, sources told Reuters.

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