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Airbus forecasts airline industry upturn. -

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ELIZABETH JACKSON: When the world's financial markets collapsed last year it spelled disaster for
the airline industry.

More than 30 airlines closed down as business travellers cancelled trips away and tourists planned
holidays closer to home.

But the European plane manufacturer Airbus says it's now hopeful of a recovery. It's forecasting
nearly 5 per cent growth in worldwide passenger numbers next year and it's planning to build 25,000
planes over the next 20 years.

Ashley Hall reports.

ASHLEY HALL: The International Air Transport Association says the world's airlines have never faced
a more difficult situation.

The economic downturn has savaged the industry causing a deeper and longer slump in travel and
cargo than even the September 11 terrorist attacks.

IATA estimates the global industry will lose about $12.5 billion this year.

But there are signs of improvement. The European plane maker Airbus is forecasting a lift in global
passenger numbers next year of about 5 per cent thanks largely to increased demand in China and
India.

And Airbus's chief operating officer John Leahy says that's a conservative estimate.

JOHN LEAHY: This industry has doubled every 15 years since the dawn of the jet age. Now for most of
that doubling we didn't have India and China and that's where the real growth is coming. So you
could actually say that we're being not optimistic, but pessimistic.

ASHLEY HALL: It's not all rosy forecasts though. Mr Leahy says he's expecting more airlines will
cancel or defer orders in the coming months before things begin to improve.

But over the next 20 years Airbus expects to build 25,000 new planes. That's 750 more than was
forecast two years ago.

John Leahy says the growth will be driven by airlines replacing their ageing fleets and a boom in
low cost carriers.

JOHN LEAHY: There's no two ways about it. The low cost phenomenon has been very important. In
America it got started with Southwest and then Jet Blue and Spirit and many of the others. We've
got about 35 per cent of the domestic market as low cost. We've built up to about the same level in
Europe.

But out in Asia right now it's like 10, 12 per cent so there's a big growth market for the low cost
carriers there.

ASHLEY HALL: Tom Ballantyne is the chief correspondent with Orient Aviation magazine. He says the
Airbus forecasts are in line with the expectations of its main rival Boeing.

TOM BALLANTYNE: Just a couple of days ago the director general of the International Air Transport
Association Giovanni Bisignani, was predicting that it would be a couple of years, it would be 2012
in fact before real growth resumed and the market for airlines began to get back to where it was.

ASHLEY HALL: In simple terms, more plane trips mean more carbon emissions. So how will Airbus deal
with the increasing pressure to cut emissions?

JOHN LEAHY: Keep in mind that aviation is producing 2 per cent of the emissions and generating 8
per cent of the world GDP. That's a very good trade off a lot of other industries can't talk about.
Aviation is also important for developing economies.

We've got to be very careful in Western Europe and the United States with a very developed
infrastructure - as I said two trips a person a year in the US, 1.3 here and 0.05 in India - that
we don't sit back and say they're not allowed to grow like we did. You know, let's hold them down.
Keep them on the trains. Let them take motor scooters.

That's just not fair. They have a right to grow their infrastructure just like we did.

ASHLEY HALL: That may sound like Airbus is talking down the chances it'll play a role in cutting
carbon emissions but Tom Ballantyne says that's not the case. He says the airline industry has a
well developed plan for emission cuts.

TOM BALLANTYNE: The airline industry globally is one of the only sectors, industry sectors, in the
world which has actually set its own carbon targets as it were. It has vowed to become carbon
neutral.

And it's not trying to dodge its responsibilities here. The industry is totally unified in the fact
that it wants a carbon trading scheme, an emissions trading scheme for the airline industry.

ELIZABETH JACKSON: That's Tom Ballantyne, the chief correspondent for Orient Aviation magazine
speaking there with The World Today's Ashley Hall.