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Boeing, Partners Expected to Scrap Super-Jet Study

July 10, 1995|From Reuters

SEATTLE — Boeing Co. and partners in the Airbus Industrie consortium will announce today that they are abandoning a joint study on building what was to be the world's largest commercial jet, a source close to negotiations said.

The companies have scheduled a joint announcement for about 9 a.m. EDT on the fate of the study, Boeing officials said Sunday.

Boeing and the four members of the European consortium, including France's Aerospatiale, British Aerospace, CASA of Spain and Germany's Deutsche Aerospace, have been working together since January, 1993, to study the possibility of jointly developing a double-decker aircraft with room for as many as 800 passengers.

For more than a year the companies have been negotiating the thorny issue of who would build such a plane and how a joint entity could be set up without running afoul of antitrust laws.

In addition to the legal and political obstacles, most analysts saw little demand for a super-jumbo jet and said it was unlikely that enough of the planes could be sold to recoup the projected $15-billion development cost.

On Friday, Boeing Chairman Frank Shrontz and officials of the four European manufacturers met in New York and decided to go their separate ways, the source said.

Analysts had speculated that the project would be scrapped, particularly since both Boeing and Airbus are studying building new large jets independently.

Since last year, Airbus, which participated in the joint study as an informal member, has actively been hawking its own idea for a super-jumbo jet, dubbed the A3XX. Boeing, meanwhile, has been studying the possibility of "stretching" its 747 jumbo jet, currently the largest passenger airplane.

"The project never made sense in the first place to me," said Bill Whitlow, analyst for Pacific Crest Securities.

With more air travel moving to thinly traveled point-to-point routes rather than through major hubs, Whitlow said, it was unlikely the manufacturers could ever sell enough planes to recover the development cost.

British Airways and Singapore Airlines are the only carriers to have publicly expressed interest in a super-jumbo plane.

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