Douglas Holds Sales Talks on New Jetliner
McDonnell Douglas has moved significantly closer to launching the MD-11 jetliner and has begun top-level sales discussions with potential airline customers for the aircraft, a derivative of the DC-10, company officials said Tuesday.
American and Delta airlines and SAS of Sweden were identified by McDonnell Douglas officials as key launch customers for the new, wide-body aircraft that will be produced at the firm’s Douglas Aircraft unit in Long Beach. Industry sources knowledgeable about the Douglas sales effort said that American and SAS have made oral commitments to place orders.
“I think there is a high probability that we will launch the MD-11 program,” said Lou Harrington, McDonnell Douglas vice president for advanced products. “I don’t want to be overly optimistic, but there is a very positive response from the airlines.”
Louis Di Leo, Douglas director of marketing for advanced products, said the probability of successfully getting the orders by the end of the year is better than 90%.
Douglas President Jim Worsham is personally making formal sales offers to key customers, Douglas officials said. He is expected to be meeting with domestic and international customers for the next several weeks.
The McDonnell Douglas board has set a requirement that the MD-11 program obtain orders for 20 aircraft, worth about $1.4 billion, before launching into full-scale development.
If McDonnell Douglas succeeds in putting the MD-11 into production, it would represent an extraordinary turn of fate in the long-troubled DC-10 program, in which the company has lost millions of dollars since the program was started in the late 1960s.
The DC-10 program has won few orders in recent years. It has been kept alive largely by an order for 50 of the aircraft by the Air Force, which uses them as airborne tankers.
The MD-11 program would require an investment of several hundred million dollars, according to Harrington. It would add several hundred engineering jobs in its early years and several thousand manufacturing jobs by late in the decade.
The MD-11 will include a number of significant changes to the DC-10 that will improve its fuel economy, increase its capacity and substantially lengthen its range.
The economy of the jet will be improved partly by adding so-called winglets, which are small upturns at the ends of the wing that reduce aerodynamic turbulence. The old DC-10 fuselage will be stretched 18.6 feet, adding 51 seats to the usual 277-seat capacity.
Among the most important changes will be the addition of rear fuel tanks in the horizontal stabilizer, carrying about 2,000 gallons of fuel. The horizontal stabilizer also will be reduced in size, saving weight.
The adoption of a so-called wet wing in the rear will extend the range of the MD-11 to 7,070 miles, enough to fly non-stop from Atlanta to Tokyo, for example.
Sales prospects for the MD-11 are viewed optimistically because of several factors. New international routes are developing in smaller markets, and competition against the DC-10 has dropped out of the market.
“The requirement for DC-10s has continued to grow and grow,” said Kenneth Taylor, marketing vice president at Beverly Hills-based International Lease Finance, the aircraft industry’s largest leasing and brokerage firm.
In the past year, the market for used DC-10s has gone from a big surplus to zero available aircraft, Taylor said.
