Newspaper article The Christian Science Monitor

Jetmakers Curb Creativity to Keep Plane Prices Down Carriers Are Placing Orders for New Versions of Old Aircraft

Newspaper article The Christian Science Monitor

Jetmakers Curb Creativity to Keep Plane Prices Down Carriers Are Placing Orders for New Versions of Old Aircraft

Article excerpt

AIRLINES are doing better these days, starting to place orders for new aircraft again. But they don't want to pay extra for fancy, newly designed jetliners.

So makers of commercial jets are busier modifying existing models than launching new ones.

Consider the biggest producer, the Boeing Company. The Seattle jetmaker is coming out with a smaller "B" version of its wide-body 777 plane next year. Customers also want a larger version of the plane, so a stretch 777 is now on the drawing boards. Boeing is also drawing lots of interest in three new versions of its smaller 737, a workhorse that has been on the market almost 30 years and has outsold all other commercial jets.

In general, airlines ordered more jets in the first half of this year than in all of 1994.

Paul Nisbet, an analyst with JSA Research in Newport, R.I., predicts that a total of 410 orders will be placed for the whole year, rising to about 650 by 1999. Wall Street has turned bullish, pushing Boeing's stock up almost 50 percent this year.

Meanwhile, aircraft that have been talked about for years - a "superjumbo" jet seating more than 600 people and an ultrafast passenger plane - are proving too costly for Boeing or its rivals to develop.

Derivatives cheaper

"If you do a derivative {of an existing plane}, it's just a lot cheaper," says Bill Whitlow, an aerospace analyst at Pacific Crest Securities in Seattle.

"I don't think we're going to see any new plane launches ... in this decade," adds Mr. Nisbet. The 777, which went into service earlier this year, was launched prior to the 1990-91 recession and airline industry downturn that followed the Gulf war.

Some airlines, in particular British Airways, have been begging for the superjumbo plane. But it could cost $15 billion to develop.

Similarly, while customers may dream of flying from New York to Tokyo in half a day, complex technology issues need resolution before the "high-speed civil transport" could be built. Among the concerns: sonic booms over land and damage to the earth's protective ozone layer.

While working on these issues, the aircraft manufacturers are keenly aware that most airlines are pushing for airplane prices to go down, not up. …

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