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Airbus and Boeing may cut production

AIRBUS SAS and Boeing Co, the world's largest plane makers, may start cutting production late this year, with output dropping as much as 35 percent in 2010, saidSteven Udvar-Hazy, the head of International LeaseFinance Corp.

Production "will come down in steps until it reaches equilibrium" with demand, with adjustments probably starting by the fourth quarter of this year, Udvar-Hazy, chief executive officer of the world's largest aircraft lessor, told reporters at Boeing facilities in Seattle yesterday. "I'd like to see it sooner."

Both Boeing and Airbus are predicting a second annual drop in orders this year as the recession damps travel demand and aircraft financing tightens. The number of cancellations and deferrals may actually exceed new orders, Udvar-Hazy said, in what will be a longer slump in the industry than the decline after the terrorist attacks in the US in 2001, Bloomberg News reported.

"Airlines are focused on survival, not ordering planes," Udvar-Hazy said.


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