Kevin O'Toole/LONDON
BOEING EXPECTS airliner sales to fall again this year and warns that production rates may have to edge down further if some financially troubled US airlines fail to recover.
The airlines have not been named by Boeing, but Continental Airlines has admitted that it is in discussions about delivery delays on at least part of its order. The carrier has near-term orders for 50 737s, 25 757s and another 12 767s.
"Unfavourable operating results being experienced by certain US airlines may result in further selective production-rate reductions," says Boeing, adding that any cuts would feed through into lower delivery numbers for 1996.
Deliveries sank from 330 to 270 during 1994 and Boeing forecasts that the total will drop to 230 this year as announced production rates come into effect. Rates for the 747 have already fallen from five to three a month over the past year and are in the process of being brought down to two.
Boeing points out that other production rates have risen, with the 767 going up to four a month in 1994, while deliveries of the 777 are also scheduled to come on stream in May.
Lack of aircraft shipments has taken its toll on the financial performance of Boeing's commercial aircraft business. Sales dropped by $3.7 billion, down to $16.9 billion in 1994, while the division's operating profits plummeted by 38%, to a little over $1 billion. Operating margins will fall again in 1995, says the company.
The results were also affected, by heavy research and development expenditure across the group, which remained at the $1.7 billion mark, largely because of work on the next-generation 737 and the extended-range 777.
The defence and space division made up some of the deficit, with sales of $4.7 billion and a 38% rise in operating profits to $303 million. Boeing says that the division received a boost from its work on the space station programme.
Group sales ended the year down by around $3.5 billion, at just under $22 billion, while profits slipped from $1.2 billion, to $856 million. Boeing predicts that 1995 sales will be $20-21 billion.
Source: Flight International
