News Analysis: End of the Line for Boeing 757?

Home>>World

Last updated at: (Beijing Time) Sunday, July 27, 2003

News Analysis: End of the Line for Boeing 757?

The clock is ticking on the survival of the 757 jet line, as Boeing Co is considering the costs and consequences of shutting down production of the 21-year-old jet model.

DISCUSSION

CHINESE

SEND TO FRIEND

The clock is ticking on the survival of the 757 jet line, as Boeing Co is considering the costs and consequences of shutting down production of the 21-year-old jet model.

Ending the 757 programme could cost about US$200 million, Boeing Chairman Phil Condit said in a conference call with analysts and reporters this week. The exact amount would depend on what Boeing would owe suppliers to end its contracts and other factors, he said.

There is no deadline for deciding whether to terminate the 757 line, he said, and the Chicago-based aerospace company offered the projection to give investors a sense of the risk. But the 757's future depends on how successful Boeing is in persuading airlines to place orders for the single-aisle mid-sized jet.

"(The decision) will occur when it needs to occur and that may not happen at all, depending on whether or not we are successful in current campaigns," Condit said on Wednesday.

For employees, the potential impact is also unclear. Boeing did not disclose how many workers are assigned to the line. The company said it could transfer workers from a shuttered 757 line to other programmes if their orders improve.

The jet has received no new orders since 2001, and even firm orders are in jeopardy.

Continental Airlines said earlier this month that it was in talks with Boeing over the "terms of delivery" of 11 757s the Houston-based carrier had ordered for delivery in 2004 and 2005.

Neither Continental nor Boeing will say what the two are specifically negotiating, although terms can include pricing and pushing back delivery dates.

Meanwhile, the backlog of 757s to be built has shrunk to 18, its lowest ever. If Continental were to cancel the 11 jets, that backlog would disappear within months.

"It's really hanging by a thread," said Richard Aboulafia, an aerospace analyst with Teal Group.

It is not that the jet, which was rolled out in 1982 and first entered service in 1983, has been unpopular. Boeing has sold more than 1,000 757s and the jet has been lauded for its fuel-efficiency and versatility in handling everything from short runways to heat, all while meeting noise restrictions.

But the 757's biggest customers - US airlines - have been struggling to stay in business amid the worst downturn in commercial aviation history.

Questions?Comments? Click here

Who Is Boosting a Revaluation of RMB? ( 4 Messages)

Chinese President Calls for More Sino-Japanese Non-governmental Contacts ( 3 Messages)

China Striving to Become World's 2nd Largest Market ( 2 Messages)

US Military Official Confirms Death of Saddam's Two Sons ( 3 Messages)

Woman Protests with Minibus Dragged by Donkey in Xi'an ( 9 Messages)