Boeing 2001 Jet Orders Fall 45 Percent
CHICAGO – Boeing Co., the world's No. 1 manufacturer of airplanes, said on Wednesday its gross orders for commercial jets fell 45 percent in 2001 as airlines suffered record-breaking losses after the Sept 11 attacks.
The Chicago-based company said it received 335 gross orders during the year -- well below the 608 received in 2000 and the recent peak of 630 in 1998.
Even before the attacks on New York and Washington, D.C., Boeing was struggling through a bad year, with airlines already hurt by a slump in profitable business travel and a weak U.S. economy.
The hijackings and crashes of four planes, all made by Boeing, then sent the aviation industry reeling. Two planes were flown into the World Trade Center and one into the Pentagon, and one crashed in rural Pennsylvania, killing a total of 3,126 people.
The nation's air transportation system shut down completely for three days. Travel demand dropped by half and is slowly rebuilding, but is not yet back to normal levels. Losses for U.S. carriers alone in 2001 are estimated at $7 billion to $9 billion.
Boeing's 2001 orders would have been even worse were it not for a modest burst of ordering late in December. A total of 41 gross orders were placed in the final weeks of 2001.
Once again, the most popular of Boeing's family of aircraft was the 737 narrow-body jet.
The single largest identified customer for Boeing in 2001 was China Southern Airlines Co. Ltd. with 22 planes ordered.
That was part of an overall sale of 30 planes to China, worth an estimated $1.6 billion. In an overall declining market, Boeing is looking to Asia as a region of strength.
FORECAST JET DELIVERIES DOWN
Boeing, which derives about 60 percent of its revenues from the sale of commercial airplanes, has predicted 2002 jet deliveries of 350 to 400 and less than that in 2003.
The company is also the No. 2 U.S. defense contractor. It recently lost a competition to build the next-generation military plane, a deal worth more than $200 billion.
BOEING TRIES TO WEATHER STORM
Last week, Boeing announced it had delivered 527 jets in 2001, five more than it had forecast immediately after the attacks. Although air traffic is returning, it still remains below normal levels and fares in many cases are too cheap for the airlines to make money yet.
Phil Condit, chief executive of the aerospace giant, has said because airlines have not over-ordered planes like they have done in the past, Boeing is better able to weather cyclical downturns in the commercial jet market.
Boeing, which moved its headquarters last year from Seattle to Chicago, has also embarked on a strategy to diversify into other areas to help protect the company from such swings.
Other large customers were AMR Corp.'s American Airlines, with 20 orders; the CIT Group, now part of Tyco International, with 21; and Northwest Airlines also with 21, according to Boeing's Web site.
Boeing had 272 net orders for 2001, after accounting for conversions and cancellations.
Shares of Boeing, the worst-performing stock among its peers in the Dow Jones industrial average last year, were lower in New York Stock Exchange trading on Wednesday, down 40 cents to $39.90.