Boeing, Airbus see blue skies in 2010

By Money Matters Editors

Finally, some really good economic news. Airbus (EADS) and Boeing (BA) are both confirming that airlines have stopped pushing-back, or deferring deliveries of commercial airlines, Bloomberg News reported Sunday.

The significance for investors? When airlines end deferrals that means they’re confident about an upturn in air travel – something that usually heralds the start of an economic rebound.

Randy Tinseth, Boeing’s (BA) head of marketing for commercial planes, said as much.

“Next year will be a year of recovery, and in 2011 airlines will return to profitability,” Tinseth told Bloomberg News. “The last air show in 2007 was absolutely a year about orders, and this year is more about working with our customers.”

Now the bad news, at least on the U.S. side: Boeing may not be ready for the aviation rebound. The next-generation 787 Dreamliner has suffered repeated delays – the most recent of which concerns modification work to fix a design flaw. Boeing has promised a first test flight of the 787 by the end of calendar 2009. Boeing’s stock has taken a dip with nearly every delay: if the 787 does not perform well in flight tests, starting with a hoped-for first flight test in December – the stock will take another swoon, as institutional investors' patience finally ends regarding the new, but controversial composite-material 787.

Moreover, a 787 failure will not simply be a loss for Boeing – the failure would ripple through the U.S. economy, due to the many sectors that feed parts to the U.S. commercial aviation industry. The U.S.'s trade position also would be hurt: commercial airplanes are a major, value-added U.S. export. Hence, the hope is the 787 can make its first test flight in December, and is able to successfully complet its trial/test period to get the new plane to airlines around the world, when they need them most: at a time when passenger air travel is turning up. If it occurs, commercial aviation will serve as one growth engine for the U.S. economy in the years ahead, a welcome sight.