Boeing Commercial Airplanes CEO Jim Albaugh talked to CNN Global Exchange at the recent Global Aerospace Summit in Abu Dhabi, with interviewer John Defterios asking about the pace of orders and deliveries for 2012, plus disputes within the EU over carbon tax plans and the WTO over subsidies. ArabianSupplyChain.com presents a transcript of the interview below:
JOHN DEFTERIOS, CNN INTERNATIONAL ANCHOR: I sat down with Boeing's chief executive officer for commercial airplanes, Jim Albaugh, and asked him if the region has reached a point of saturation with all those major numbers being posted, both on orders and infrastructure.
JIM ALBAUGH, CEO, BOEING COMMERCIAL: We do our forecast for the next 20 years of airplane orders. And in our view, there are going to be 2,500 airplanes ordered from this part of the world. And we think that'll be about, you know, $450 billion, $500 billion worth of airplanes.
DEFTERIOS: Of the $4 trillion that your study pointed to between basically 2010 and 2030, how much is that going to come outside of the classic G-7 countries?
ALBAUGH: It's pretty extraordinary the change that we've seen over the last 20 years and the change we're going to see in the next 20 years. If you go back to say, 1990, about -- over 70 percent of our sales were in Europe and North America. In 20 years from now, it's going to be less than 40 percent. And much of it will be in the emerging countries. Twenty years from now, the U.S. will probably still be our largest market. But then it's going to be China and believe it or not, the third largest country in terms of deliveries will be the UAE.
DEFTERIOS: If you keep the pace that you had up in the first quarter, you'll have what - 548 deliveries and 1,600 orders for 2012. Can you keep that sort of pace?
DEFTERIOS: Putting the pressure -
ALBAUGH: Well, actually, I'd say our guidance for deliveries is north of that. I think our guidance on deliveries is 585 to 600. You know, we intend to hit that. The pace of orders probably will not. You know what you're seeing this year is a lot of the customers that committed to the 737 Max. Those orders are now becoming definitive agreements, and you're seeing us booking those. You know, we don't really talk about the number of orders. Generally, we don't give you a forecast on that. But our book to bill should be, you know, well over one this year.
DEFTERIOS: The 787 deliveries, the first was in September. Can you kind of keep the number of 40 to 45 now after the three years of delays in terms of customer demands and deliveries?
ALBAUGH: Well, what we've said is between the 747-8 and the 787, we'll deliver 80, 85 of those airplanes. And I've seen nothing so far this year that would lead me to believe that we won't be able to make that many deliveries. And yes, about half of those will be 787s.
DEFTERIOS: As you know, there's a huge controversy surrounding the emissions trading scheme or the carbon tax that the European Union went forward with. How do you dial it back, or should they dial it back and convert this into a global pact through the United Nations? Because it's raised a number of eyebrows in the emerging countries, particularly in China?
ALBAUGH: Yes, I don't think the ETS system will do anything to drive carbon emissions in the right direction. To the contrary, it's going to take money away from the airlines that they could be spending on more efficient equipment, which would drive the CO2 emissions down. You know, in my view, we ought to have a pause. We ought to go back to ICAO. We ought to come up with something that all the countries agree to.
DEFTERIOS: Another thorn of contention, even though you're good, bitter rivals, between Airbus and Boeing, is the dispute within the World Trade Organization, which has been carrying on for almost a decade now. Subsidies on both sides. Some are suggesting the two of you should reach an agreement.
ALBAUGH: Well, we think a level playing field is very important. We think everybody should play by the same set of rules. If you go and you read through the documents that came out of this dispute, you know, Airbus got $18 billion of illegal launch aid. We got $3 billion or $4 billion of indirect subsidies from the Department of Defense and from NASA. If we've done some things that are inconsistent with the WTO, we need to go fix them. If Airbus has done some things that are inconsistent, they should fix those, too. We are not looking for negotiating settlement; we're looking for compliance.
DEFTERIOS: Once again, the CEO of commercial airplanes for Boeing, Jim Albaugh here in Abu Dhabi. You heard during that conversation that they have expectations of $4 trillion of sales between now and 2030.