Terrorist Attacks Will Cut Output by 1,000 Jets, Boeing Chief Says

Boeing Co. Chairman Phil Condit said Monday that it will take 28 to 42 months for commercial airline traffic to recover from the Sept. 11 attacks, during which the company will lose production of more than 1,000 airplanes.

Comparing the current industry downturn to an air travel slump during the Persian Gulf War a decade ago, Condit said: “I think it’s two to three times as long for this recovery to occur. That means 28 to 42 months. That’s going to be a tough go.”

“We will probably lose something in excess of 1,000 airplanes’ worth of production in that period,” Condit said after a speech to the Economic Club of Detroit.

Chicago-based Boeing, the world’s largest airplane manufacturer, said shortly after the Sept. 11 attacks that it would slash production and lay off as many as 30,000 commercial jet workers by the end of 2002 as orders from airlines shriveled.

Boeing shipped 422 jetliners in the first 10 months of 2001 and plans to finish the year at 522 deliveries. But it expects deliveries will shrink to 350 to 400 next year and even lower in 2003.

About 12,000 of Boeing’s 200,000 workers will be gone by Dec. 14 and the 20,000 to 30,000 expected layoffs will be complete or nearly so by the middle of next year.

Air traffic appears to be down 10% to 20% since Sept. 11, compared with just 2% in the aftermath of the Iraqi invasion of Kuwait in 1991, Condit said. It took 14 months for the industry to recover to normal levels from the Gulf War, he said.

Condit also said the crash of an AMR Corp. American Airlines Airbus A300 in New York on Monday would add to travelers’ worries. But the crash would not have much effect on air traffic volume if the crash turns out to be accidental, he said.

“The ones who aren’t flying are worried. This won’t help,” Condit told reporters before the speech. “But I don’t think it will change the numbers very much.”

Boeing shares closed down 18 cents at $33.06 on the New York Stock Exchange on Monday.

Boeing’s strategy over the last few years of diversifying away from the commercial airline into more military and high-tech applications has helped offset the losses from the downturn since Sept. 11, Condit said.