Airbus and Boeing may start cutting production late this year with output dropping as much as 35% in 2010, Steven Udvar-Hazy, the head of International Lease Finance Corp, was quoted by Bloomberg. He said production 'will come down in steps until it reaches equilibrium' with demand, with adjustments probably starting by the fourth quarter of this year. Both Boeing and Airbus are predicting a second annual drop in orders this year as the recession damps travel demand and aircraft financing tightens.