Boeing’s silver lining

Press, 4 April 1989, Page 12

Boeing’s silver lining

When Audi cars were suspected (wrongly, it now appears) of uncontrolled acceleration, sales drove off a cliff. But when a Boeing-built United Airlines 747 shed a substantial chunk of its fuselage off Hawaii in late February, analysts promptly revised their sales projections upwards for Seattle’s aircraft colossus. If ageing aeroplanes need to be replaced, Boeing most likely will supply the replacements.

Last year Boeing had sales of nearly SUSI 7 billion, with profits 28 per cent above those of 1987. This year, after only ten weeks, Boeing’s ■- i - commercial-aircraft division ...had /already sold 50 aircraft 'worth SUSS.4 billion. The company seems likely to surpass its own .1989 sales forecast of SUS 22 billion. There is a backlog

of 1,000 aircraft on order. The company announced last month the largest expansion of its Renton, Washington, plant since the factory was built in the Second World War. The expansion will enable Boeing to increase its production from; 15 737 s a month to 17, and from five 757 s a month to seven. One reason for that isA 747 accident in which nine passengers were sucked to their death when a portion of the fuselage was ripped away at 22,000 feet. The deaths — along with horrific tales of drink carts flying through the 747’s decompressing cabin and a stewardess clingingto. the jet’s spiral staircase to save her life — amplified mount- , ing disquiet over "geriatric jets.” More than half of the worlds air fleet is now more than ten

years old/. Some 1500 jets are near the usual-retirement age of 20 years. Analysts predict that many airlines will simply buy new jets rather than deal with increasingly complex and expensive safety-related maintenance. That alone could translate into close to 3000 orders during the next 16 years. Over-all aircraft orders during that span are pegged at 8500, worth SUS42O billion. If Boeing holds its market share of 60 per cent it can expect to book a whopping SUS2S2 billion in sales. Production pressures last month led Boeing to “borrow” as many as 670 workers from V Lockheed’s plant in Georgia, where production of the C-5B military transport is winding down. Copyright, the “Economist.”