Boeing struggles to save major Dreamliner orders.

Byline: Saifur Rahman 

Boeing to revise outlook as $260bn order backlog shrinks on declining demand

Dubai Dwindling worldwide demand outlook, cancellation of orders and growing competition from new aircraft manufacturers remain the biggest worry for the Boeing Company u which dominated the global aviation industry for more than 70 years.

The aircraft manufacturer is revising its Current Market Outlook (CMO) downwards, which will be unveiled today. The previous CMO says the Middle East will absorb 1,719 aircraft worth $300 billion (Dh1.1 trillion) in the next 20 years.

Boeing will end this year with 480-485 deliveries and a similar number next year, after two consecutive years of record firm orders that, at one point of time, had created an order backlog of $270 billion u and secured production slots till 2014-2015.

However, right now, it's the B787 Dreamliner that is turning out to be a near nightmare u giving its top executives sleepless nights.

Boeing has faced about 111 cancellations of orders this year. It is trying to rescue one with Qatar Airways.

A top Boeing official said it has held meetings with Qatar Airways officials in what is seen as an attempt to rescue a major deal from collapsing.

"I met the Qatari officials and I can tell you, it was good," James F. Albaugh, Executive Vice-President of the Boeing Company and President and CEO of Boeing Commercial Airplanes, told a media briefing. He said Boeing will start test flights of the Dreamliner this year.

"Deliveries are scheduled for the fourth quarter of 2010. All our customers including Qatar Airways, are obviously disappointed with the delays. But they'll all wait for a good product."

Price tag

The airline has taken a major hit this year, as its customers have cancelled more than 111 aircraft so far, which has reduced its order backlog to $260 billion.

The airline has an order backlog of about 400 aircraft in the Middle East, worth about $72 billion with an average price tag of $180 million apiece. Emirates, Etihad Airways and Qatar Airways are some of Boeing's largest customers in the Middle East.

Albaugh, who recently took over Boeing's commercial airplane manufacturing division from the defence business, said the aircraft demand will remain flat till the next cycle of economic growth starts.

"For the next few years, the demand for fresh orders remains flat and I do not know when the next cycle of growth is going to take place," he said.

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