Boeing is to close down the former McDonnell Douglas (MDC) MD-80 and MD-90 production lines, but has delayed its verdict on the long-term fate of the MD-95 until January 1998. It is to keep the MD-11 line open.
While the closure of the twin lines was expected, the biggest surprise of the product-strategy analysis was Boeing's forecast of a market for up to 300 additional MD-11s over the next 20 years, around 80% of them freighters. Most industry observers, and even elements of pre-merger MDC, had virtually written off the tri-jet which has a backlog of only 19 aircraft. "That programme, we believe, could have a very long, successful production run into the future," says Boeing Commercial Airplane Group president, Ron Woodard. Future upgrades of the tri-jet have not been ruled out either, according to Woodard, who says that development studies are possible "-to make sure it has a future".
Passenger versions will still be offered, although "we'll focus our marketing efforts on the MD-11 freighter", he adds. Boeing lost out on freighter competitions to the MD-11 and now admits that the aircraft is "well placed" between the 767-300F and 747-400F. The production rate of one a month is expected to remain unchanged for the time being.
The news on the MD-95 was outwardly more disconcerting for the Long Beach employees, who have been encouraged by reports of Boeing's intentions to develop a twinjet family from the new aircraft, including an 80-seat regional jet. Boeing remains committed to building the 50 aircraft ordered by AirTran, formerly ValuJet, but says that a decision beyond that depends on reducing the cost of production. This will not be easy, particularly since the MD-95 was developed originally along innovative risk- and cost-sharing lines by a cash-strapped Douglas Aircraft.
Despite Boeing's overt caution towards further MD-95 commitments, the omens remain good. "The MD-95 does offer the potential to be a very successful product in the 80- to 120-seat area, where it will fit into Boeing's product strategy. It is a tremendous opportunity to be very successful in a marketplace in the future where we don't have to face the development costs of an all-new product," says Woodard.
The company estimates the market for the MD-95 across the 80-, 100- and 120-seat range to be around 2,300 aircraft over the next 20 years. Production could rise to five or six a month, "if we can get costs down", Woodard says. Boeing has begun talks with suppliers, aimed at reducing costs on "everything" by amortising their prices across a larger production run.
MD-80 and MD-90 production is expected to cease around mid-1999, when current production commitments end. There are 13 unfulfilled MD-80 orders and 91 MD-90s yet to deliver. Assembly of 20 aircraft in Shanghai for China's TrunkLiner programme will continue into 2000, beyond the closure of the Long Beach line, and "we are reviewing-along with our Chinese partners-possible future TrunkLiner collaboration", says Woodard, adding that "we do not expect to accept any new orders".
The decision to terminate the MD-90 is expected to revive Boeing's efforts to launch the stretched Next Generation 737-900. The larger version, with three more seat rows than in the -800, holds an additional 18 passengers and is designed to compete head-on with Airbus Industrie's A321.
Source: Flight International
