EADS chief says orders may be down for two years

With the global economic quagmire flattening demand for aircraft, the head of Airbus SAS’s parent said carriers may be less inclined to take new aircraft in the next year or two as they grapple with the decline in global traffic, the said.

“The market isn’t dead, we have some campaigns, but it’s not extremely active, that’s clear,” European Aeronautic, Defence & Space Co. chief executive Louis Gallois told Bloomberg. “It’s not like two or three years ago.”

Airlines may struggle to keep taking planes next year and in 2011 because of balance sheets weakened by falling traffic, Gallois said. Airbus has so far only secured half of the 300 planned orders it has earmarked for this year, indicating the worst for the industry may not yet be over.

The dearth of orders this year is one indicator a recovery isn’t yet under way, even amid some signs the global economy is emerging from recession, Gallois said.

He added that planning beyond the first few months of 2010 remains difficult. “In the beginning of a crisis, airlines try to preserve orders, time schedules for deliveries because they don’t want to change their planning - they want to keep an edge against competition,” Gallois said. “At the end of the crisis, sometimes, they have to take difficult decisions; they are increasingly short of money.”