Sign of hope for Boeing

EVERETT — Air travel is on the rebound in Europe, although airlines there still are having a tough time making money, a top executive of KLM Royal Dutch Airline said Friday.

All things considered, "we are really not unhappy" with recent trends, said Peter Hartman, KLM’s managing director and chief operations officer.

"Traffic is coming back," Hartman said following a ceremony at Paine Field during which KLM took possession of its first 777-200ER from Boeing. "The only problem is still pressure on yields."

Hartman noted that KLM filled an average of 84 percent of its seats last month, a sign that air travel is on the mend following the long worldwide slump caused by the Sept. 11, 2001, attacks, the war in Iraq and the outbreak of SARS in Asia.

His comments came at the end of a week in which U.S. airlines reported trends similar to what Hartman reported for Europe: More people are flying, but changes in corporate travel practices mean fewer passengers are paying top dollar for business travel.

During the week, Seattle-based Alaska Air Group cited stronger passenger loads during its third quarter as a key factor behind profits, which almost tripled compared with last year’s third quarter.

While there are signs of hope, airline orders remain slow, said Marlin Dailey, Boeing’s vice president of sales for Europe, who also spoke at Friday’s 777 delivery ceremony.

"By taking this 777, KLM is clearly demonstrating its commitment to commercial aviation at a time when we need commitment," Dailey said.

The uncertainty is affecting efforts to sell Boeing’s proposed 7E7 advanced jetliner in Europe, Dailey said later.

The reception for the new airplane has been "fantastic," he said. "The issue really is timing … are they in a strong enough financial condition that they feel comfortable committing to a new product?"

About a third of the 50 airlines Boeing is talking with about the 7E7 are in Europe, Dailey said, adding that it’s his goal to have a European airline as one of the launch customers.

KLM won’t be one of them, Hartman said.

"The first year (with a new plane), you’re having many operating problems," he said. That would give passengers a bad first impression of the new aircraft, which is tentatively scheduled to enter service in 2008.

But by 2010, KLM will be ready to replace its fleet of MD-11 jets, and "the 7E7 is absolutely a possibility," Hartman said. "I’m very enthused about what’s going on with the 7E7."

KLM and Air France are seeking regulatory approval to merge, creating a pan-European airline that would be the continent’s largest, he said, and that airline would carry more clout with manufacturers. "That’s one of the advantages of the alliance … a strength in purchasing power," Hartman said.

Being aligned with a French airline doesn’t mean KLM will be limited to buying French-built Airbus planes, he added.

For one thing, Air France is a major Boeing customer, Hartman noted. It will receive the first 777-300ER, the larger sister to the jet KLM received Friday.

KLM has been buying planes from Boeing and its merger partner, McDonnell Douglas, for 69 years, Hartman said.

"We are already part of the family. We like them, love them," he said. "They build excellent aircraft, and we need them."

Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.