This is a partial transcript from "Your World with Neil Cavuto," October 27, 2004, that was edited for clarity.

NEIL CAVUTO, HOST: Well, another big day for Boeing (search), too, which topped Wall Street expectations easily. Its profits shot up 78 percent from a year ago.

Earlier I asked Harry Stonecipher, Boeing's chief executive, if he thought the defense business would change if Senator Kerry is, indeed, elected president.


HARRY STONECIPHER, CEO, BOEING (BA): We don't think so. My experience has been that about the last time there was any change was when Jimmy Carter became president, canceled the B-1 program. Then Ronald Reagan came in and reinstituted the B-1 and started on a defense build-up.

But for the most part, no matter who's president, they take that office and then they suddenly, after they take the oath, the next thing they realize is that there's an awful lot of threats out there.

CAVUTO: Well, the reason why I ask, though, sir, is that there is a concern for your industry and for defense stocks in general, which I would include you, certainly, that it would be a less friendly environment under a Democrat than it would a Republican. Or is that a little bit too black and white?

STONECIPHER: I think that's too black and white. And I tell you, I spend an awful lot of time with my peers, and we don't see it that way.

CAVUTO: Let me ask you a little bit about what's happening on the commercial side, if you don't mind.


CAVUTO: You have Delta (search) right now and ATA Holdings on the verge of bankruptcy filings. And that would be a large chunk of your business. They stop ordering planes in that event. Are you worried about that?

STONECIPHER: Actually, I don't think they stop ordering planes. In the case of Delta, we have a lot of airplanes out for several years with them. I think what you're talking about is restructuring.

But we run our business off of the revenue passenger mile curve and we're at world record travel around the world. And so somebody is going to haul the passengers and we just want them to be on Boeing airplanes.

But ATA, as a matter of fact, I think did announce this morning. As there is speculation about Delta, but quite frankly what we see of Delta, it looks a little better today.

CAVUTO: But is it inevitable that we're just going to have fewer large carriers and does that concern you?

STONECIPHER: I don't think it's inevitable at all. When you say large carriers, you know, Southwest Airlines is a large carrier.

CAVUTO: Good point.

STONECIPHER: So I think you're going to have low-cost carriers, because travel has become a commodity. And more and more, people don't call up and ask you how big the seat is or what's for dinner. They want to go across the country for $119.

And so it's a tough business and cost has to come down. If you're what I call a "full cost, full service carrier," you're going to have one segment of the market, but it's going to be a lot smaller than the people who want to fly for a few dollars.

CAVUTO: The economy is doing well. Your business is doing very well; yet the president is in the fight of his life. Are you surprised by that disconnect?

STONECIPHER: I really am. And, you know, I'm really surprised at the way people view the economy right now, because there are so many signs that the economy is really strong. If you look at people like Caterpillar and Cummins who build engines for heavy trucks and you look at the heavy truck builders, they're running at capacity.

CAVUTO: So what's the president doing wrong?

STONECIPHER: I'm not sure he's doing anything wrong.

CAVUTO: So do you think he's going to win?

STONECIPHER: We have a big public debate going on.

CAVUTO: So do you think he's going to win?

STONECIPHER: Well, I don't go around predicting those things, you know. I bet St. Louis would win. Look where they are.

CAVUTO: Well, that might still yet happen. We might still see that.

STONECIPHER: It's a long shot, though. And I don't know. I certainly thought the president would have an easier time of it than he's having. That's for sure.

CAVUTO: Harry Stonecipher of Boeing.

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