McDonnell Bypassed for Boeing in Jet Order : Aerospace: Decision by SAS to acquire new 737 model is a setback for the proposed MD-95.


A Scandinavian airline dealt a blow to McDonnell Douglas Corp.'s proposed MD-95 jetliner program Tuesday by announcing a $1.2-billion order for 35 Boeing Co. jets.

The MD-95, which McDonnell's Douglas Aircraft division plans to build in Dallas, was thought to be a strong contender for the order placed by Scandinavian Airline System (SAS).

"It's disappointing," said John Thom, a Douglas spokesman. "We thought we had the right plane and offered a very competitive deal."

Stockholm-based SAS is a longtime Douglas customer, and its fleet currently includes about 100 Douglas MD-80 and DC-9 twin-engine aircraft. Douglas, headquartered in Long Beach, hoped to formally "launch" production of the 100-seat MD-95 with the help of an SAS order.

But SAS instead went entirely with Boeing, becoming the first airline to order its new 737-600 short-haul jetliner. The plane, a variant of Boeing's hugely successful 737 line, seats up to 128 passengers.

While SAS's move "could delay the launch" of the MD-95, Thom said Douglas would keep pressing other airlines to buy the aircraft. "We have other customers we're talking to," he said, declining to elaborate.

Analysts said SAS's order was a setback, but not a death blow, for the MD-95. "If they can get it launched, they should be able to sell more" of the planes, said Joseph F. Campbell Jr. of Lehman Bros. in New York.

Still, Campbell said SAS' decision revives the debate about whether the world's airlines--aware of Douglas' recent inability to secure sizable new orders along with its longstanding financial struggles--are still willing to place huge orders with the company.

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