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McDonnell Gets Order It Needs to Launch MD-11 : SAS Request for 12 New Jets Brings Total to 26; Program Expected to Add 6,000 Jobs in Southland

December 18, 1986|NANCY RIVERA BROOKS | Times Staff Writer

Scandinavian Airlines System said Wednesday that it has placed a $1.4-billion order for 12 proposed MD-11 jetliners from McDonnell Douglas, apparently assuring the launch of the long-stalled program that will mean more than 6,000 new jobs to Southern California.

With this order, a total of 26 of the successor to the DC-10 have been earmarked for production by Douglas Aircraft, a Long Beach division of McDonnell Douglas of St. Louis. Although Douglas President James Worsham said early this year that 20 firm orders were needed to begin production of the aircraft, a Douglas spokesman on Wednesday declined to say whether the MD-11 program can now begin.

"That's a decision that has to be made by our board," spokesman Don Hanson said. "We expect a decision to be made in the near future."

The next board meeting is scheduled for late January, he said.

But Scandinavian Airlines spokesman John Herbert said the airline has received assurances from McDonnell Douglas that its order is enough to move the aircraft from the drawing board into production. "We are 100% sure of that," Herbert said from the airlines' headquarters in Stockholm.

Stretched Version of DC-10

Worsham was traveling in Europe on Wednesday pitching the company's line of aircraft and was not available for comment, Hanson said. Other top executives also were out of the office, he said.

The MD-11 is a stretched version of the DC-10, with redesigned wings, new engines, an updated cockpit and more room for passengers and cargo. The $500-billion program will create 6,000 new jobs in Long Beach and Torrance by 1991 as well as increased employment at suppliers and subcontractors in the Southland, Douglas officials have said.

With the MD-11, "the company is making a leap from 1970s technology to late 1980s technology," said Howard A. Rubel, an analyst with the C. J. Lawrence investment firm in New York. "It's kind of like taking your old Model T and souping it up and making it a small Rolls-Royce."

McDonnell Douglas earlier this month received a $1-billion order from British Caledonian Airways for nine of the wide-body jetliners, followed a few days later by a $500-million order for five MD-11s from Mitsui, a Japanese conglomerate.

Swissair Order Likely

Swissair said Wednesday that its board met in Zurich and authorized reserving six MD-11s. But the board will not vote on whether to make a firm commitment to buy the aircraft until March, a spokeswoman said.

Also rumored to be interested in the MD-11 are American Airlines, Federal Express, Korean Air Lines and Finnair.

Scandinavian Airlines said it selected the MD-11 because the aircraft "is consistent with our strategy to select smaller aircraft that can give our business travel market frequent departures and many non-stop flights," President Jan Carlzon said. The MD-11 also consumes 20% less fuel than the DC-10, he said in a statement.

The MD-11s will gradually replace Scandinavian Airlines' current intercontinental fleet of nine DC-10s and two Boeing 747s.

The first MD-11 will be delivered in March, 1991, the company said. Scandinavian Airlines' fleet also includes about 90 smaller aircraft.

The MD-11 program, which has been delayed a year by slow orders, is one of the most important projects to McDonnell Douglas' future in the commercial aviation business, which is dominated by Boeing Co.

"The profit potential of this program is enormous," analyst Rubel said.

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