Tens of thousands of British manufacturing jobs could be under threat this year as the aerospace industry braces itself for a severe slowdown. The end of the boom in the sector was signalled yesterday as Boeing revealed that its new aircraft orders fell last year by almost half.

Boeing's 662 orders handed victory in the sales war to Airbus, its European rival. which recorded 756 orders at the end of November.

However, neither manufacturer is likely to celebrate last year's results with the prospects for business in 2009 having nosedived.

New orders have dried up and airlines are being forced to defer or cancel existing ones because of a lack of financing and falling demand from passengers.

Two days ago, the Chinese Government told its domestic airlines not to accept delivery of any new aircraft this year. In a statement that sent shockwaves through the industry, Yang Guoqing, deputy head of the Civil Aviation Authority in China, said: “It is the duty of airlines to cut capacity, defer plane orders, return leased aircraft and ground or sell older planes.”

With an estimated 241 aircraft expected to be delivered to China this year, Mr Yang's instruction could result in a quarter of the world's total deliveries being cancelled.

This could have a devastating impact on aerospace companies and their suppliers, particularly in Britain.

The Society of British Aerospace Companies (SBAC) estimates that 113,000 people are directly employed by the industry and 276,000 are supported indirectly. Airbus employs more than 10,000 workers at its wing factory in North Wales and Rolls-Royce, the engine maker, employs a further 12,500 at its Derby factory.

Other suppliers include Thales UK, which makes avionics systems and flight simulators at its base in Crawley; and Messier-Dowty, which makes landing gear.

Cobham and Meggitt are also important suppliers to the civil market and GKN has just bought part of Airbus's factory near Bristol.

Boeing and Airbus insist that they have sufficiently large order books to withstand any difficulties this year. Boeing said yesterday that it had orders for more than 3,700 aircraft, valued at about $275 billion (£181 million), representing nearly ten years' worth of production.

However, analysts believe that airlines will increasingly defer or cancel orders leaving both Airbus, Boeing and their suppliers with unwanted planes and parts this year. The looming crisis is due to both a drop in demand for air travel and difficulty raising finance.

The three largest aircraft financing organisations are ILFC, which is owned by AIG; GCAP, owned by GE; and RBS Aviation, part of the Royal Bank of Scotland. All three lenders have reined-in their financing operations and AIG and RBS have effectively been nationalised.

Smaller airlines are finding it difficult to raise finance to buy the aircraft they have ordered and many of the Boeing and Airbus orders come from these carriers. As a result, Boeing and Airbus are understood to be offering direct finance to preferred customers.

A senior airline executive told The Times this week: “Aircraft orders are going to start evaporating this year and Airbus and Boeing have to be concerned. Financing is tough for everyone, but the weaker carriers are really going to struggle.”

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax