December 27, 1997 in Nation/World

Boeing Will Miss Its 1997 Target For Market Share Company Can’t Quite Make Its Goals, As Airbus Is Gaining Ground

Associated Press

With only a handful of days left in the year, Boeing Co. will apparently miss its goal of capturing at least 60 percent of new orders for commercial aircraft.

Analysts say, however, that doesn’t necessarily mean Boeing is losing ground permanently to Airbus jets.

So far this year, Boeing has booked firm orders for 551 jets, plus 15 of the models produced by McDonnell Douglas, which Boeing acquired this year. That would give Boeing 55.1 percent of the market, compared with 44.9 percent for Airbus Industrie of Europe, which had 461 orders.

In 1996, Boeing captured 64 percent of the market.

Boeing chairman Phil Condit said this week he was satisfied with Boeing’s market share, and noted that other factors, such as unannounced orders, may alter the percentages.

Also, Boeing may be even further ahead in the dollar value of orders, though totals aren’t disclosed, because it sold more large, expensive aircraft such as the Boeing 747, he said.

Analysts estimate Boeing’s share by dollar value through November, including the Douglas airplanes, at about 58 percent.

The manufacturers will announce their versions of 1997 market share in the next few weeks after any late orders are tallied.

In any event, Airbus gained ground this year, including making a significant inroad into the United States with orders for 109 smaller airplanes from US Airways.

“Airbus has had a very good year and deserves to be congratulated,” said Peter Jacobs, aerospace analyst with Ragen MacKenzie in Seattle.

But, he added, that won’t necessarily translate into long-term gains.

“If next year Airbus shows more inroads, then it’s more serious,” Jacobs said. “But you have to look at a longer rate. There often are fluctuations.”

“This is not necessarily a long-run thing,” said Aaron Gellman, head of the Transportation Center at Northwestern University in Evanston, Ill.

Delivery rates also are an important indicator, said Byron Callan, an analyst with Merrill Lynch in New York.

Boeing estimates it will deliver 505 airplanes next year - 550 counting Douglas jets - while Airbus predicts it will deliver 220. That would give Boeing about 70 percent of the 1998 deliveries.

A factor in that, however, is Asia’s economic crisis, which may prompt more delivery delays and possibly cancellations for both Boeing and Airbus, analysts said.

That could have a significant effect on Boeing earnings, since about 52 percent of Boeing’s backlog of 777s and 48 percent of its backlog of 747s are from Asian carriers, analysts estimate.

Boeing has said no orders have been canceled, but acknowledged this month that as many as 60 deliveries could be delayed in the next three years.

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