Boeing sales drop by 45 percent

By Bryan Corliss

Herald Writer

Boeing’s new jet orders plummeted 45 percent last year from the previous year’s level, the company reported Wednesday.

The total of 335 new gross orders was Boeing’s lowest since 1994, and marks the second year in the past three that the company has been outsold by rival Airbus, which reported 352 orders through the end of November.

Boeing customers canceled or converted 63 jet orders during the year, pushing the net total down to 272.

Boeing claimed to maintain is 62 percent market share for the year, based on the fact that it built and delivered more airplanes than Airbus during 2001. About 80 percent of the planes ordered in 2001 will be delivered within the next three years, Boeing said.

The sales results are not surprising, said John Rogers, an analyst with D.A. Davidson in Portland.

"The airlines are still hurting, obviously," he said. "The outlook is still pretty weak. You’re going to see lower rather than higher production levels and earnings."

Shares of Boeing stock finished Wednesday at $39.90, down 43 cents from the day before.

Boeing took 620 jet orders during 2000, which was a remarkable year for new aircraft sales. That total included 117 777s, the most ever sold in a one-year period since Boeing launched the long-range wide-body.

Boeing predicted at the start of the year that 2001 sales would be down to around 400 jets. But sales lagged with the onset of the recession, and even before Sept. 11 that target appeared to be out of reach.

Boeing did close the year with almost 40 orders in December. The majority of them went to unidentified buyers, Rogers noted, speculating they were the result of airlines exercising options to buy jets at previously negotiated prices before the options expired at year’s end.

Boeing’s ubiquitous 737 was by far its bestseller, with 188 new orders — more than half the year’s total.

Twenty of those went to China Southern Airlines, which was the No. 1 identified buyer of Boeing planes during the year with a total of 22, including two 747s.

Boeing has now sold more than 1,000 of its next generation 737s in four years, Commercial Airplane Group chief Alan Mulally said in a statement released Wednesday.

"No other airplane program has achieved such worldwide success in such a short time," he said. "This is the best-selling airplane program ever, and we are extremely pleased."

The Everett-built 767 also enjoyed a rebound in 2001, which was the 20th anniversary of the jet’s launch. Boeing took new orders for 51 of the jets during the year after landing only 12 sales in 2000.

Nineteen 767 orders were canceled or converted during the year, but the net total of 32 still made the plane Boeing’s second best-selling model for 2001. And that doesn’t include the leases for 100 767s for the U.S. Air Force that Congress has authorized.

However, orders for 777s dropped almost 75 percent, from 117 to 30, and 747 orders were off about 40 percent, from 27 to 16.

Boeing actually showed a net loss in orders for 717s during the year. It took six orders for new jets but saw another 20 orders canceled when American Airlines took over TWA, which had ordered the 106-seat jets.

American announced 20 Boeing jet orders during the year. Northwest Airlines and the CIT Group, a leasing company, ordered 21 each.

Boeing delivered 527 jets in 2001. That total will fall to between 350 and 400 this year, and is likely to drop even further in 2003, company officials have said.

Airbus sales chief John Leahy last week said he expects total orders for the two jet builders to drop 60 percent in 2002.

"The question is just when will the business get better," Rogers said. "We’ve probably got some time before (it does)."

But long-term opportunities are there, Boeing maintains. Mulally’s statement notes that there are 3,000 commercial jets between 20 and 30 years old, which are ready for replacement with more efficient models.

You can call Herald Writer Bryan Corliss at 425-339-3454

or send e-mail to corliss@heraldnet.com.