Airline Crunch Isn’t Expected to Hurt Boeing

Boeing Co. lost an old friend when Pan Am folded last week, but the nation’s leading aircraft maker expects a large backlog of orders to allow it to weather customers’ economic problems.

America’s other manufacturer of commercial jets, McDonnell Douglas Corp., has a smaller backlog. But the St. Louis-based company, which is also the nation’s No. 1 defense contractor, recently made a deal with an Asian partner that could help it develop a new airplane.

Analysts say the long-term outlook for the commercial aerospace industry is good, although not recession-proof.

“Certainly it’s not surprising, given the length of the recession and dismal state of the airline industry, that if we don’t have recovery fairly soon, it’s going to start to catch up with aircraft manufacturers,” said Bill Whitlow, who follows the industry for Gallagher Capital in Seattle.

The anemic condition of the airline industry was demonstrated Wednesday when Pan Am abruptly died, stranding passengers and throwing 7,500 employees out of work. The 64-year-old airline was the third big U.S. carrier to die this year, following Eastern and Midway.

Pan Am had no orders pending, but Boeing had sold it 208 planes in the past. They included the famous clippers--the B-314 flying boats that pioneered overseas service in the 1930s; the first 707, Boeing’s first jetliner; and its first 747 jumbo jet.

“It’s somebody who had been part of aviation history and somebody alongside us,” said Boeing spokesman Russ Young. “It’s a special sense of loss.”

Other airlines have responded to the recession by delaying delivery dates for new planes or cutting options.

American Airlines announced agreements in November with Boeing and McDonnell Douglas to push back deliveries. American also canceled or deferred options on the purchase of some jets.

Young said Boeing has lost no firm orders. “What’s really happening is we’re seeing deliveries moving into the future a bit,” he said.

Still, Boeing Chairman and Chief Executive Frank Shrontz raised questions about the company’s ability to withstand the recession at a speech Wednesday.

Asked about a big loss expected at United Airlines, Boeing’s biggest customer, Shrontz said if the airline industry doesn’t improve early in 1992, “we could end up with a significant problem.”