Boeing, Rivals Play Air-Show Politics
FARNBOROUGH, England - All was going smoothly until a reporter asked In-Sung Hwang whether his airline might order the 777.
The setting was a news conference in the Boeing chalet here at the Farnborough International Air Show yesterday.
Hwang, chairman of Seoul-based Asiana Airlines, had just announced firm orders for 27 Boeing jets, worth $3 billion, and options for an additional 24 planes.
Counting an order Asiana placed last April, the 2-year-old South Korean carrier could take delivery of 65 spanking new Boeing 747s, 767s and 737s by 1999, should the airline exercise all its options.
Hwang boasted about carrying more than 4 million passengers to date and about compiling a near-perfect departure-reliability record of 99.82 percent, to go along with an equally remarkable on-time performance rate of 97 percent.
Dean Thornton, Boeing Commercial Airplane Group president, hailed Hwang for quickly putting together what will be ``one of the largest all-Boeing fleets in the world.''
Said Thornton, beaming at Hwang, ``I can't remember an airline that's done as much as you in such a short period of time.''
Then someone spoiled the party by asking Hwang about the 777, Boeing's proposed 350-seat, long-range twin-jet that has yet to attract a launch customer.
Speaking through an interpreter, Hwang responded with the caution of a seasoned poker player. He said Asiana was ``carefully reviewing'' not just the 777, but the McDonnell Douglas MD-11 and the Airbus A-330, as well.
Hwang's intent was transparent: Should Asiana someday need a 350-seat jetliner, it is smart to dicker price by playing one manufacturer off the others.
Hwang's comment underscores the unprecedented competition between the Big Three aircraft manufacturers that is being translated into a game of one-upsmanship here at the aerospace industry's annual major gathering.
Minutes after the Asiana order was announced, Boeing rival Airbus convened a news conference to announce that Northwest Airlines had agreed to convert 75 options for the 150-seat A-320 jet into firm orders. Northwest also took out new options on 30 A-321s, the proposed stretched version of the A-320.
In an earlier media gathering, fiery Airbus General Manager Jean Pierson lambasted the ongoing trade negotiations whereby the U.S. is attempting to force Germany to halt exchange-rate subsidies to Airbus.
``Enough is enough,'' Pierson roared. ``The U.S. dollar is the reference currency for aircraft manufacturers, for the airlines and for the bankers. This (Persian Gulf crisis) is the first world crisis in which the U.S. dollar has gone down.''
Pierson said Airbus, which is second only to Boeing with about a 30 percent market share, will turn its first operating profit this year.
But don't look for Airbus to launch new airplane models. Instead, Pierson said, the group will pursue derivatives of existing models, including a stretched version of the A-330, which could be ready for certification as early as 1995, putting it on the same development and sales track as the 777.
Meanwhile, McDonnell Douglas is pulling out all the stops to complete the certification of the MD-11, a derivative of the out-of-production DC-10, by Halloween. That would put the company in position to deliver as many as 30 MD-11s in 1991, thus generating much-needed cash flow.
McDonnell Douglas had a new order to announce yesterday, as well. The GPA Group of Ireland placed firm orders for 12 MD-11s and options for 23 more, a deal worth $2.5 billion.
Graham Boyd, GPA's director of new aircraft acquisition, said the large MD-11 order didn't necessarily mean GPA is not interested in the 777.
``If the 777 were launched, then GPA would have an interest in that aircraft,'' Boyd said.
Lou Harrington, McDonnell Douglas vice president and general manager of the MD-11 program, said the company recently decided that the proposed stretch version of the MD-11 - the so-called MD-12X - would have a larger, all-new wing. The MD-12X would be 35 feet longer than the MD-11 and would be able to carry 377 passengers.
Harrington said the MD-12X should be certified and put into service by 1995 - that magic year when Boeing hopes to begin delivering 777s and when Airbus may be offering a stretched A-330.
Meanwhile, Boeing announced today at the air show that Lauda Air, of Austria, placed an order for 767-300 and two 737-400s. The deal is valued at $180 million.
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