Boeing to begin taking orders for all-new passenger jet

Wednesday, December 17th 2003, 12:00 am
By: News On 6

SEATTLE (AP) _ Applause and whoops of joy swept through a room full of Boeing workers as the company announced it will start taking orders for the new 7E7, billed as a lighter, roomier, more fuel-efficient airliner.

The Boeing Co. announced plans Tuesday to take orders for its first all-new jet since 1990 in a bid to reclaim some of the market from European rival Airbus.

Plans call for the jet to be built in Everett, where Boeing has built planes for decades.

``I felt relieved, excited, just happy for the area,'' said Terri Irwin, a 25-year Boeing employee who works in supply management. ``We all love what we do and we want to see it stay.''

The 7E7 Dreamliner will use 15 percent to 20 percent less fuel per passenger, have bigger windows and slightly wider aisles and seats than other planes.

Boeing is waiting to see how many orders it gets before formally launching the project, and the jet likely wouldn't enter the market before 2008. The disclosure came at a year-end celebration in Seattle on Tuesday after Boeing's board of directors met for two days in Chicago.

After losing 40,000 of their colleagues to layoffs over the past two years, Boeing workers are understandably eager for a reason to celebrate.

``It's a chance to prove we're still the best,'' Darryl Hue of Bellevue, a 17-year Boeing employee who has been working on the 7E7 design, said Tuesday.

``If we don't take advantage of this opportunity now, who knows if we'd ever build another airplane,'' said Dave Goodmanson, an electronics designer who has worked for Boeing for 17 years. ``It was a very good day.''

The 200-plus-passenger 7E7 is designed to compete with Airbus' A300 series and to replace Boeing's older 757 and 767. Several analysts agreed that the 7E7 would have broad appeal, especially as airlines recover from the Sept. 11, 2001, attacks and the economy improves.

If Boeing's board had rejected the airliner, ``it would have been a very clear signal that Boeing was going to milk its commercial aircraft operations for all the profits they can and get out of the business,'' said Paul Nisbet, with JSA Research.

``You can't go on forever without renewing your product lines,'' Nisbet said. ``They've really not been keeping up and that's really why Airbus has been able to jump ahead of them.''

Boeing has trotted out plans for two other planes in the past three years, the super-jumbo 747X and the super-fast Sonic Cruiser. But it shelved both plans before deciding to begin taking orders for the 7E7, and in the meantime, Airbus gained substantial ground in the commercial jet market.

Airbus claims an 85 percent share in the 200- to 250-passenger category, a reversal from a decade ago, when Boeing enjoyed a similar level of dominance.

Boeing's announcement highlighted the differences between its strategy and that of Airbus. Boeing believes the future is in smaller, more efficient jets that will get passengers to their destinations more directly. Airbus is betting on the 550-passenger A380, which would allow airlines to pack more customers onto each flight between major hubs.

In France, Airbus Commercial Director John Leahy offered Boeing congratulations but also disputed the 7E7's appeal, saying Airbus' A330-200, launched in 1998, is just as good a deal.

``I can't figure out who the customers are who are about to buy the 7E7,'' he said. ``As soon as I do, I'll go out and talk to them about the A330-200.''

Boeing has been battered by bad news in the past two years. Besides laying off tens of thousands of workers after the terrorist attacks decimated the aviation industry, it suffered a top-level shake-up in the last two months following contracting scandals and questions about the company's direction.

And Boeing dealt a blow to Washington's pride in 2001, when the company moved its corporate headquarters from Seattle, where it was founded in 1916, to Chicago.

Boeing's decision to build the plane in Everett ended months of angling by states that sought to land the project, which is expected to create 800 to 1,200 jobs. Washington state offered the aerospace industry tax breaks totaling $400 million through 2009, and potentially worth $3.2 billion over 20 years, if Boeing built the 7E7 there.