Commercial Jet Business Once Again Starting to Take Wing

The commercial jetliner business is finally taking off again, a development that could bring further job stability to Southern California’s rebounding aerospace industry.

After four years of depressed sales, the commercial jetliner industry’s top three players--Boeing Co., Europe’s Airbus Industrie and Long Beach-based Douglas Aircraft Co.--received new orders for a combined 566 airplanes last year, according to figures released Thursday. That’s their best showing since the world’s airlines ordered 1,066 planes from them in 1990.

Aerospace Industries Assn., a trade group, is predicting continued sales gains this year amid record profits for the airline industry.

Such a rebound in orders benefits Southern California by adding revenues to Douglas and hundreds of suppliers, such as Northrop Grumman Corp., Rohr Inc. and AlliedSignal Aerospace.

The comeback complements the recent upswing in the Southland’s military aerospace industry, where such major programs as McDonnell Douglas Corp.’s C-17 cargo plane and Northrop Grumman’s B-2 stealth bomber have continued to get government funding.

Douglas, the McDonnell Douglas unit that has been scraping for jetliner sales in recent years, signed new orders for 114 jetliners in 1995, enabling it to surpass the 106 new orders garnered by second-ranked Airbus.

The world’s biggest airplane maker, Seattle-based Boeing, topped the field with 346 orders valued at $31.2 billion, giving it about 61% of the total orders placed among the big three jet makers.

Jetliner sales plunged in the early 1990s when airlines worldwide, their financial losses mounting and their aircraft capacity bulging, sharply cut back ordering new aircraft. The downturn forced all three jet makers to curb production and lay off thousands of workers.

In 1995, though, the airlines enjoyed a dramatic return to profitability. Those earnings, along with the carriers’ need for new planes after years of delaying orders, have prompted them to start ordering more jets.

It is not clear if such a rebound in orders will again lead to problems for airlines, which have a pattern of ordering more planes only then to see passenger traffic slump--resulting in fare wars and massive losses.

Analysts also remain cautious about the aircraft makers’ profit outlook, because competition among the three companies has sparked fierce price-cutting that could limit their earnings despite higher sales.

Although Douglas got orders for more airplanes than Airbus last year, Airbus still sold more planes that carry heftier price tags. Airbus said its 1995 orders had a total value of $7 billion and Douglas, although it hasn’t yet formally announced the value of its orders, is estimated to have sold planes valued at about $4.3 billion.

Indeed, on a dollar basis, Boeing placed its share of the new-order market last year at nearly 70%.

Douglas’ 1995 tally was helped by two major sales. In one, the Saudi Arabian national carrier Saudia ordered 33 planes from Douglas and 28 from Boeing, shutting out Airbus entirely. The other big order for Douglas came from ValuJet Airlines, a young Atlanta-based carrier that ordered 50 of Douglas’ new MD-95 aircraft--enabling the company to formally launch production of the 120-seat plane.

The debut of Boeing’s 777 wide-body jet was a key factor in fattening Boeing’s order book and helped the company reverse its performance in 1994, when Airbus won a narrow victory by landing 125 orders to Boeing’s 120. Douglas had only 17 new orders that year.