Boeing Revising Production of New Jumbo Jets : Company to Negotiate Late-Delivery Penalties

From Associated Press

Boeing Co. is close to a revised production schedule for the new 747-400 jumbo jet but will negotiate late delivery penalties with at least four customers, a company executive said.

Phil Condit, executive vice president of Boeing Commercial Airplanes, also predicted that the long-range jetliner would be certified for a second engine type next week and for a third next month.

Deliveries of 747-400s initially had been scheduled to begin late last year, but Boeing executives said in October that wiring problems would delay delivery of the first 20 jets. A second delay was announced in December when initial certification by the Federal Aviation Administration took longer than expected.

Several airlines have called for compensation for late deliveries.

"We have contracts with a whole number of airlines that we have not met," Condit said Tuesday, "and so clearly, like any good business, when you don't meet your contract, you sit down and reach an agreement on how you're going to settle that."

Boeing Will Negotiate

Without saying how the compensation might be made, Condit said Boeing would negotiate settlements with Northwest, Lufthansa, KLM and Singapore Airlines "on an airline-by-airline basis."

In January, Boeing officials spent five days "readjusting" the 747 production line at Everett, north of Seattle, and again examined the production schedule. The line went through another five-day readjustment in late March or early April for catch-up work that had fallen out of sequence, said Commercial Airplanes spokeswoman Elizabeth Reese.

The 747-400, which can carry 412 passengers more than 8,000 miles nonstop, is an extensively updated version of the 747, which was first flown in 1969. The new plane has a computerized cockpit designed for a crew of two instead of three, is built with advanced materials and has a larger wing.

Condit and other Boeing officials acknowledge that they may have been overly ambitious in trying to bring out essentially four new 747-400s at once--three different engine types, plus a "combi" version of the airframe that can carry freight on the upper deck. In addition, they said each airline wants planes customized to different needs.

"We took on a real task up there at Everett in terms of three different engine certs, a combi, 18 customers in the first year, and we didn't do as well as we would have liked," Condit said.

"We're holding very close to the plans that we laid out in January," he said. "It's not perfect, to be honest with you. We missed by a couple of days, but overall I'm happy with how things are going."

Schedule Withheld

Boeing's latest production schedule has been withheld, but Commercial Airplanes spokeswoman Deane Darling said five 747-400s have been delivered--three to Northwest Airlines and two to Singapore Airlines, all powered by Pratt & Whitney engines.

Approximately a dozen more 747-400s have been built and are undergoing final preparation before delivery, Reese said.

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