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Bigger B-717???
Boeing to decide mid-year if will make bigger 717
Friday February 28, 6:01 pm ET
By Peter Henderson
LONG BEACH, Calif., Feb 28 (Reuters) - Boeing Co.(NYSE:BA - News) plans to decide by mid-year whether or not it can muster enough orders to justify building a stretch version of its smallest commercial jet, the money-losing 717, the head of the program said on Friday.
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Boeing vice president Jim Phillips told reporters that airlines including AirTran Holdings Inc.(NYSE:AAI - News), Midwest Airlines (NYSE:MEH - News), formerly Midwest Express, and European members of the Star Alliance were interested in a stretched 717-300 version of the fuel-efficient plane, if Boeing went ahead.
Boeing generally considers a substantial number of orders from at least two carriers would economically justify a line extension.
"If the interest appears strong, and we are getting those indications ... hopefully, I say, mid-year, sometime before the end of the third quarter it will all come together," Phillips said.
Chicago-based Boeing has cut production of the 106-seat twin-engine aircraft to one per month and has enough orders at that rate to keep the lights on in the Long Beach, California, factory for about three years.
Midwest Airlines took delivery on Friday in Long Beach of the first 717-200 of 25 it ordered, and it has an option for 25 more.
The Boeing board would have to approve a plan to build bigger 717s, which would carry 20 to 22 more seats and fly about the same distance.
The plane has a range of a relatively short 1,430 nautical miles (2,645 km) or 2,060 nautical miles (3,815 km) in a high gross weight version, but it is tuned for making shorter hops of a few hundred miles rather than cross-country flights.
Boeing has reported a "forward loss" of $250 million from the program, as orders never reached the originally planned 200. Boeing has booked orders for just 153, of which 115 have been delivered. About 10 airlines fly the jet
The Star Alliance is also considering buying the current 717-200 as a bloc, which would give them more negotiating power and offer Boeing a larger order, Phillips said.
He said there was interest in Europe in the group, which includes Germany's Lufthansa (Frankfurt:LHAG.F - News) and Scandinavia's SAS AB (Stockholm:SAS.ST - News) , Australia's Qantas Airways (Australia:QAN.AX - News) and United Airlines (NYSE:UAL - News) among others.
Midwest Airlines Chief Executive Tim Hoeksema, who accepted delivery of the 717, said he had at least a year to decide whether to exercise an option to order 25 more of the planes.
Midwest could use stretch versions of the 717 to replace its fleet of MD-80s, which shares some of its design features. Boeing inherited the 717 program in 1997 when it bought rival McDonnell Douglas. The MD-80 carries up to 172 passengers.
Midwest will use five of its MD-80s to power a new low-cost carrier designed to attract leisure travelers.
Hoeksema said the carrier would have a new name, which indicated it was affiliated with Midwest Airlines, in about a month. Midwest on Wednesday said it would launch the airline in the third quarter and also said it was temporarily laying off 13 percent of workers.
Boeing to decide mid-year if will make bigger 717
Friday February 28, 6:01 pm ET
By Peter Henderson
LONG BEACH, Calif., Feb 28 (Reuters) - Boeing Co.(NYSE:BA - News) plans to decide by mid-year whether or not it can muster enough orders to justify building a stretch version of its smallest commercial jet, the money-losing 717, the head of the program said on Friday.
ADVERTISEMENT
Boeing vice president Jim Phillips told reporters that airlines including AirTran Holdings Inc.(NYSE:AAI - News), Midwest Airlines (NYSE:MEH - News), formerly Midwest Express, and European members of the Star Alliance were interested in a stretched 717-300 version of the fuel-efficient plane, if Boeing went ahead.
Boeing generally considers a substantial number of orders from at least two carriers would economically justify a line extension.
"If the interest appears strong, and we are getting those indications ... hopefully, I say, mid-year, sometime before the end of the third quarter it will all come together," Phillips said.
Chicago-based Boeing has cut production of the 106-seat twin-engine aircraft to one per month and has enough orders at that rate to keep the lights on in the Long Beach, California, factory for about three years.
Midwest Airlines took delivery on Friday in Long Beach of the first 717-200 of 25 it ordered, and it has an option for 25 more.
The Boeing board would have to approve a plan to build bigger 717s, which would carry 20 to 22 more seats and fly about the same distance.
The plane has a range of a relatively short 1,430 nautical miles (2,645 km) or 2,060 nautical miles (3,815 km) in a high gross weight version, but it is tuned for making shorter hops of a few hundred miles rather than cross-country flights.
Boeing has reported a "forward loss" of $250 million from the program, as orders never reached the originally planned 200. Boeing has booked orders for just 153, of which 115 have been delivered. About 10 airlines fly the jet
The Star Alliance is also considering buying the current 717-200 as a bloc, which would give them more negotiating power and offer Boeing a larger order, Phillips said.
He said there was interest in Europe in the group, which includes Germany's Lufthansa (Frankfurt:LHAG.F - News) and Scandinavia's SAS AB (Stockholm:SAS.ST - News) , Australia's Qantas Airways (Australia:QAN.AX - News) and United Airlines (NYSE:UAL - News) among others.
Midwest Airlines Chief Executive Tim Hoeksema, who accepted delivery of the 717, said he had at least a year to decide whether to exercise an option to order 25 more of the planes.
Midwest could use stretch versions of the 717 to replace its fleet of MD-80s, which shares some of its design features. Boeing inherited the 717 program in 1997 when it bought rival McDonnell Douglas. The MD-80 carries up to 172 passengers.
Midwest will use five of its MD-80s to power a new low-cost carrier designed to attract leisure travelers.
Hoeksema said the carrier would have a new name, which indicated it was affiliated with Midwest Airlines, in about a month. Midwest on Wednesday said it would launch the airline in the third quarter and also said it was temporarily laying off 13 percent of workers.
