Boeing Says Boom To Continue -- Strong Market For Jets Seen
The Boeing Co. today predicted a continuing booming market for commercial jetliners into the year 2005 - more than 9,900 worth $626 billion - enough to keep its factories, profits and the Puget Sound economy booming.
The forecast is up 27 percent from last year and will mean heavy orders for Boeing and its competitors, Europe's Airbus Industrie and McDonnell Douglas.
Boeing controls about 55 percent of the world-wide market for commercial jets, meaning it would have about 5,450 of those orders if it kept its market share. That averages about 370 orders a year.
At present, Boeing has a backlog of almost 1,800 jets worth $85 billion.
Meanwhile, Boeing today announced retirements of two corporate executives and new management appointments to help lead the company through the booming years ahead.
John Hayhurst, Boeing Commercial Airplane Group vice president for marketing, said the more optimistic outlook is based on a forecast of a strong market in air travel driven by continued growth in discretionary income and a decrease in the cost of travel after allowing for inflation.
In addition, replacement of aging aircraft will be a factor, but Hayhurst said there still is a question about ``how soon.'' He said it will be economics of fuel prices and noise regulations, not physical condition of the planes, that causes their retirement.
The Boeing forecast agrees with one issued last week by Salomon
Brothers stock analyst Julius Maldutis, who studied 13 airlines and concluded the need for new aircraft will boom into the next century. But Maldutis put heavier emphasis on replacement than on growth.
Boeing predicts 70 percent of the market will be for growth, while only 30 percent will be for replacement of older aircraft.
Jack Howard, director of market research for the commercial airplane group, who headed the Boeing forecast, said the company believes ``there is still room for growth.''
Boeing predicted passenger growth would average about 5 1/2 percent annually through 2005. This means the market will almost double by 2000 and expand by nearly 250 percent by 2005. Non-U.S. airlines are expected to grow faster than domestic carriers - at a rate of 6.5 percent through 2000.
Heaviest growth, they say, will be to and from Asia from North America and from Europe.
There are possible risks, Hayhurst said, such as a major economic plunge, heavier taxation of jet fuel, some shortage of jet pilots and mechanics, and congestion, which he cited as ``more of a risk than all the others combined.'' The biggest demand seen is in the 240- to 350-seat category - where Boeing's proposed 777 would fit. Hayhurst said 50 percent of all seats to be delivered after 1995 will be jetliners with 300 seats or more - including Boeing 767s and 747s, as well as Douglas' MD-11 and the Airbus A330/340.
The corporate personnel shifts include the retirement of Malcolm Stamper, 64, vice chairman of The Boeing Co. and second in command since 1985. Stamper will retire in April, marking the end of an era for the aerospace giant.
Stamper, president for 13 years before becoming vice chairman, had a major role in the development of the 747 jumbo jet. He ran the 747 program from start-up to airine introduction and has been involved in commercial-airplane and corporate operations ever since. He's been with the company since 1962 and a member of the board of directors since 1972 when he became Boeing president. Stamper will be 65 on April 4.
No replacement was named. His position was created in 1985 when Frank Shrontz became president and the now-retired T.A. Wilson was chairman.
Boeing also said today that Harold Haynes, 67, executive vice president and chief financial officer for 25 years, would retire in April. A University of Washington graduate, he has been involved with Boeing financial affairs since he became controller in 1959. He joined Boeing in 1954 and has been on the board since 1966.
Haynes' duties will be assumed by Boyd Givan. Shrontz said Givan, Deane Cruze and Bert Welltver have been promoted to corporate senior vice presidents of finance, operations, and engineering and technology, respectively. They join Douglas Beighle , also company secretary, at this level .
Shrontz said also Dean Thornton, president of Boeing Commercial Airplane Group, and Dan Pinick, president of Boeing Defense & Space Group, had been moved up to executive vice presidents of The Boeing Co.