Here are Boeing's (BA) comments, from its conference call, on the impact of high fuel prices on its business and the aircraft parts and airline industries:
Despite minimal impact on our business so far, we are concerned about the impact of energy prices on our customers, and we do expect that we could have more deferrals and some cancellations as our customers continue to wrestle with the new energy reality. In light of that, it is important to explain how we manage our commercial delivery schedules for Sky Line. Deferrals and cancellations are a normal part of the airplane manufacturing business. In our production and delivery planning, we assume we'll see a certain amount of both based on historical data and our judgment about each of the customers in our backlog and the potential impact of things like today's energy prices. We use these factors to determine our production rate in a disciplined manner and to balance our sales plan with delivery position availability.
Right now the demand for fuel-efficient new aircraft is still higher than what we can supply from our production plan. This gives us the ability, to a greater degree than in the past, to reallocate deferred or cancelled delivery positions to other customers who have been waiting for delivery slot to come available.
In addition we continue to have unprecedented diversity in our commercial backlog, which now includes only 10% from U.S. airlines. If we see more deferrals or cancellation, the geographic mix should protect us from a significant downturn in any one region. With the BCA backlog representing almost eight years of production, we also have opportunities for customers to pull deliveries forward.
Therefore, based on our current view of the environment and strong backlog position, we remain confident we will deliver the commercial airplanes in our guidance for 2008 and 2009, and that deliveries will be higher in 2010 due to 787 production ramping up.
The quotes are taken from the Boeing transcript which was published on Seeking Alpha a few hours after the call ended.