The head of International Lease Finance Corp (ILFC) has said that Airbus and Boeing the world's two largest plane-makers must end a growing pattern of delays.

"We are getting into a pattern that is not sustainable from a company standpoint," Henri Courpron, chief executive of ILFC, said at the Reuters Aerospace and Defence Summit in Washington this week.

ILFC, a unit of American International Group Inc, (AIG) cancelled an order for 10 A380 freighters after delays that eventually led to the cargo variant of the world's largest airliner being shelved.

Allaying concerns

ILFC is the largest customer for Boeing's upcoming 787 Dreamliner, which is already more than two years behind schedule. Boeing recently delayed the first delivery to the first quarter of 2011.

Courpron said Boeing is solving the problems that led to its most recent Dreamliner delay, but he added he does not know if the company can meet its current delivery target. ILFC has $14bn worth of aircraft on order, including 74 Dreamliners.

Courpron, a former senior Airbus executive, said Boeing and Airbus need to allay concerns about their reliability as they weigh possible modifications to their best-selling short-haul aircraft to improve fuel-efficiency.

"Their own performance on existing products is generating a lot of questions which normally you would not ask yourself when you have a new programme," Courpron said.

Courpron said ILFC is re-evaluating its order for 10 A380 passenger jets, a plane he said is not core to its portfolio. The new superjumbo is popular with operators but poses challenges to lessors because of the relatively small customer base, he said.

Courpron also said he was satisfied with the design and market acceptance of the A350, a mid-sized plane being developed by Airbus in response to the successful Boeing 787 Dreamliner.

The plane, due to be delivered in 2013, was modified several times at design stage and was severely criticised by ILFC's founder before Airbus settled on a composite fuselage.

Growth in orders for commercial aircraft

"I am comfortable with the A350 because the market is comfortable with the A350. The last two decisions by significant airlines (have benefited the A350) which is very meaningful to me. We are happy with our A350 position."

ILFC has 12 A350-800s and A350-900s on order worth a total of $4.7bn at current list prices. It has ordered 74 Dreamliners worth more than $13bn.

Courpron said he sees a pickup in orders for commercial aircraft, which dwindled in the last year amid an economic downturn that drained travel demand. But he added that ILFC feels no pressure to order new planes.

"I don't feel any urge or urgency in buying more airplanes," he said.

Courpron also said there is no active effort by ILFC's parent AIG to sell the leasing company, which was founded in 1973 by Steven Udvar-Hazy.

The financial crisis that caused the near-collapse of AIG also hurt ILFC. AIG attempted to sell ILFC last year but struggled to find buyers because of the leasing company's high debt load. ILFC repaid nearly $4bn of US loans after selling $4.4bn in secured and unsecured debt in August.

AIG named Courpron CEO of ILFC in May following the departure of Udvar-Hazy, who has set up his own competing firm.

Boeing aims to boost defence sales by 4 to 5% over the next five to 10 years

Meanwhile Boeing Co. aims to boost defence sales by 4 to 5% over the next five to 10 years, even in the face of a global recession and uncertainty over defence budgets worldwide, the company said this week.

Boeing's defence unit will account for more than half of Boeing's overall revenues this year, as the unit's growth makes up for some of the expected drop in commercial plane sales due to a two-month machinists strike, Boeing's defence chief Jim Albaugh told the Reuters Aerospace and Defence Summit in Washington this week.

Boeing's Integrated Defence Systems unit, second only to Lockheed Martin Corp in Pentagon sales, is also sticking to its plan to raise international sales to 20% of its total, up from about 13% currently.

"We're not scaling that back and we're also not scaling back the long-range business plan we've put in place," Albaugh said at the summit, referring to the previously stated plan to increase revenue by 4 or 5% compounded annually over the next five to 10 years.

Incremental increases

A report from Reuters said that Albaugh warned that US defence spending will likely flatten out in coming years due to mounting budget pressures, and some new arms programmes may be delayed because of budget pressures and the high cost of adding troops.

"While the defence budget may continue to go up, it'll be incremental increases rather than the dramatic increases we've seen," said Albaugh.

To hit its growth target, Boeing needs to extend current production programmes, win contracts to replace Boeing weapons already in service and increase international sales, while reducing its own cost structures and offering the Pentagon cheaper alternatives to new programs, Albaugh said.

Albaugh said it was clear that defence secretary Robert Gates, asked by president-elect Barack Obama to remain in his job, would review every major weapons programme, including some of Boeing's biggest projects, such the US Army's $160bn Future Combat Systems modernisation.

In July, Boeing forecast defence unit revenue of $32bn to $33bn for this year, growing to between $33.5bn and $34.5bn next year, which would represent an increase of about 4.5% if the unit hit the mid-range of those forecasts.

Boeing suspended that outlook during the machinists' strike, which shut down its commercial plane plants for 58 days this autumn.