Jet aircraft manufacturer Boeing Co. is finding out just how much things can change in a year.
It was only that long ago, in a robust industry, that airlines were lining up to order Boeing's planes, even paying each other to buy a better space in line.
Now, the Seattle company is keeping a cautious eye on the declining fortunes of its customers. Boeing still has enough firm orders to count on for the next two years, but Chairman Frank Shrontz told the Seattle Post-Intelligencer that the company is seeing what was once a rush of new orders begin to slow.
Although the financial health of the nation's airlines is worsening, most carriers are likely to remain in the market for new aircraft and Boeing need not fear unless the nation enters a protracted recession, said Paul H. Nisbet, an aviation industry analyst for Prudential-Bache Securities Inc.
Boeing has a backlog of 1,700 aircraft on order, with delivery not scheduled on some of them until 1997 or 1998. To keep up with business, the aircraft firm is pushing out 34 aircraft a month and will accelerate that pace to 38 a month. So far only one airline, USAir Inc., has revised its order. The airline, facing continuing losses this year, delayed delivery of 12 Boeing 737s scheduled to be deliver in 1991 and 1992 until 1995. But USAir also threw in a sweetener -- an order for an additional 24 aircraft.
In fact, according to Nisbet, the airlines' bad times, spurred by a softening economy and rising fuel prices, could actually increase business for Boeing. Older aircraft are more expensive to operate, both because they consume more fuel and because many of them require three-member cockpit crews compared with two crew members required by newer jets. Older aircraft also require expensive retrofitting to meet increasingly strict noise standards.
Boeing noted in a market outlook analysis published earlier this year that, as a result of a 1960 surge in deliveries, many airplanes would be retired in the early 1990s -- perhaps as many as 300 a year.
Some parts of the market for commercial aircraft are softening, however. Interest in used aircraft -- which are hard to sell for the same reasons airlines are getting rid of them -- is slowing. Also airlines are less likely than they were to pay another aircraft customer in order to get ahead of them in line for new aircraft deliveries.
The health of Boeing's business is a matter of interest not only to its shareholders, who have watched the company's stock drop from a high of nearly $62 dollars to its close yesterday at $43, but also to trade officials, since the company is a large exporter of goods.
Shrontz also told the Seattle newspaper that the aircraft manufacturer might reevaluate a decision to develop the new Boeing 777 jetliner if no launch customer signs up for the aircraft. However, several major foreign and domestic airlines, including United, Delta, American, British Airways and KLM Royal Dutch Airlines, are still interested in committing to the new jet.