Boeing Lease Plan May Climb $10 Billion

From Reuters

Boeing Co. acknowledged that its controversial plan to lease to the U.S. Air Force 100 767 commercial jets as refueling tankers could bring it more than $30 billion, up to $10 billion more than the figure it has been using to tout the program.

Bob Gower, vice president for 767 tanker programs, said as much as $10 billion more in support fees was at stake for the Chicago-based airliner maker, in addition to the $17-billion lease and an Air Force option to buy the jets for $4 billion at the lease’s end.

For the record:

12:00 a.m. May 3, 2003 For The Record
Los Angeles Times Saturday May 03, 2003 Home Edition Main News Part A Page 2 National Desk 1 inches; 58 words Type of Material: Correction
Boeing lease plan -- A Reuters wire article that ran in the Business section Friday incorrectly quoted a Boeing Co. official as saying that a plan to lease to the Air Force 100 Boeing commercial jets as refueling tankers could generate an additional $10 billion in support fees. The estimate was actually $2.8 billion, a Boeing official said.

Top Pentagon and White House officials are scheduled to meet today to review the plan, which critics have denounced as corporate charity for Boeing sparked by the loss of business after the Sept. 11 attacks on the U.S.

The armed services usually buy their aircraft and other equipment outright. Under the Boeing proposal, the Air Force would lease the 767s through a specially created entity at 4.36% interest for the life of the lease, based on current rates, the company said.