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Final OK Said to Be Near on Saudi Jet Buy

From Times Staff and Wire Reports

The national airline of Saudi Arabia has decided to buy 46 Boeing jetliners and 15 McDonnell Douglas MD-11 jets under its previously announced plan to purchase $6 billion of U.S.-made aircraft, sources in the Saudi capital of Riyadh said Wednesday.

The proposal is now subject to approval by Saudi Arabia’s Cabinet, headed by King Fahd. Neither St. Louis-based McDonnell Douglas nor Seattle-based Boeing would comment on the reports. Both cited their policies of having customers announce new orders.

Boeing is expected to get the bulk of the contract, but the orders for the MD-11, which cost about $100 million each, would still give a major lift to the McDonnell Douglas aircraft division in Long Beach, where 11,000 people build the 300-seat, three-engine jumbo jet.

Besides the MD-11s, the national carrier Saudia wants five of Boeing’s 747s, 29 of its smaller 737s and 12 of the newly developed 777s, according to the sources, who asked not to be identified.

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In February, when the Saudis unveiled their plan to buy only American-made planes, McDonnell Douglas said the contract would probably not require the company to hire more workers. But it said the deal would help maintain current employment until the commercial aircraft industry emerges from its slump.

McDonnell Douglas, a distant third in the industry behind market leader Boeing and Airbus Industrie of Europe, desperately needs new orders to survive the industry’s slowdown. The tentative Saudi award would be worth at least $1.5 billion to the company.

McDonnell Douglas ended 1993 with two fewer new orders than when the year began because of cancellations, and it landed a new order for only a single airplane in the first three months of 1994. However, it still has a backlog of about 200 airplanes, which should keep its production line active through most of the decade.

Boeing and McDonnell Douglas executives have been negotiating with the Saudis since March 20, after President Clinton personally helped persuade the kingdom to replenish its fleet with U.S.-built aircraft instead of buying some planes from Airbus as well.

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McDonnell Douglas’ stock closed Wednesday at $116 a share, down 50 cents, while Boeing slipped 25 cents to $44.50, both in New York Stock Exchange trading.


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