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Boeing Counters Airbus Jumbo Jet With 747X

July 07, 2000|From Reuters

SEATTLE — Boeing Co. expects to launch development of its proposed 747X super jumbo airliner in six to nine months, spending about $4 billion on the project, the company said Thursday.

Chief Executive Phil Condit said Boeing's cash flow alone could finance the 747X, which would seat more than 500 passengers, making it about 20% bigger than the current 747-400 model but still 10% smaller than Airbus Industrie's proposed A3XX.

"The entirety of the development [costs] we see on 747X are in the vicinity of $4 billion," Chief Financial Officer Michael Sears told reporters.

The 747X project is at the same stage as the 555-seat A3XX, with Boeing already offering to sign order contracts with airlines, subject to making enough sales to justify development, Chief Executive Phil Condit said.

Derivative aircraft like the 747X cost far less to build than all-new models and therefore require fewer orders to justify development, Boeing has said.

"I would love to have three [launch customers], but we typically end up launching with one," Condit added.

Condit said Boeing was pitching the 747X to the same customers Airbus has announced as potential launch customers for the A3XX, a $12-billion project that the European firm began marketing last month. Airbus has promoted the A3XX for years, with Boeing on the sidelines saying there was an insufficient market for such a plane.

The 747X would be a modified version of the existing 747 able to take off at heavier gross weights that would allow the creation of two sub-variants. One would carry more fuel but only a few more passengers than the 420-seat 747-400, giving it greater range. The other would have 500 or more passengers but only the same range as the 747-400.

Engine makers are offering two turbofan designs for the 747X and Condit said both were likely to be available on the aircraft.

Between 20% and 25% of a jetliner's price is for engines.

Boeing stock closed up 19 cents to $43 Thursday on the New York Stock Exchange.

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