Smiths Group - the aerospace to medical products firm with plants in the West Midlands - does not expect a slowdown in the buoyant commercial aviation market for at least the next two to three years.

Keith Butler-Wheelhouse, Smiths' chief executive, yesterday said he expected the year ahead to be similar to the last, when the group's aerospace division, which has factories in Cheltenham and Wolverhampton, lifted sales by 15 per cent to £1.158 billion and headline operating profits by 18 per cent to £118 million.

The division has been boosted by increased production by the world's big two aircraft makers Airbus and Boeing.

Sales in the commercial sector were 25 per cent higher, with most of the growth related to Boeing 737 and Airbus A320 narrowbody aircraft.

The first delivery of systems for Airbus' new A380 " superjumbo" was made during the year and the huge aircraft will eventually become a significant source of revenue, Smiths said.

Mr Butler-Wheelhouse also confirmed that there was still very strong demand for aircraft from low cost airlines, which he said would help to prop up the market "for the foreseeable future".

Middle Eastern airlines are continuing to buy aircraft to replace existing fleets and to expand, while markets in Asia are still operating well, he added.

"We're not expecting a slowdown in terms of production rates for at least the next two to three years," he said.

On Wednesday Derbybased aero-engine maker Rolls-Royce forecast at the Aviation Expo China event in Beijing that the passenger air traffic market in the Asia Pacific region will exceed Europe in 2008 and subsequently overtake the US in 2022 to become the largest segment in the world.

China alone is expected to need 2,300 jets to meet annual growth in airline traffic of nine per cent during the next 20 years.

Smiths said the first phase of its new aerospace plant in China, serving commercial engine customers, is now operational and a second stage, to be used for airframe equipment manufacture, has been completed.

Mr Butler-Wheelhouse said Smith's aerospace division is in a strong position, with increased production of narrow-body jets bringing benefit in the near term and cost reduction from restructuring resulting in margin improvements.

"The division should perform well in the year ahead," he added.

Smiths also said that it planned to save up to £25 million a year at its US Medex business after it posted an 18 per cent rise in full-year pretax profits before goodwill and one- off items to £413 million. Group sales in the year to July 31 rose by 13 per cent to more than £3 billion, with all divisions contributing double digit growth in profits.

The group said there were major synergies to be achieved through integration and rationalisation at Californiabased Medex, a supplier of medication delivery equipment, which was acquired in March for £499 million.

Smiths added it had combined the Medex sales operation with the sales activities of its own medical division and is unifying marketing, back office functions, distribution and the supply chain.

"Looking ahead, manufacturing will be rationalised and opportunities taken to transfer more assembly to low cost locations," the group said.

Meanwhile, European planemaker Airbus said it had booked 417 aircraft orders since January 1, as the industry gears up for what could be a record year despite financial problems at major airlines.

Commercial director John Leahy said Airbus expected to end the year with a 50 per cent share of the global market against Boeing, even though its US rival so far had some 60 per cent of the market in 2005.

Airbus is battling to maintain its lead over Boeing as the two aerospace firms vie for customers for their future mid-sized, long-haul jets - the Airbus A350 and the Boeing 787 Dreamliner.