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, said Steven 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.

(Shanghai Daily February 9, 2009)