Boeing Boss: Company Is On Right Track
Condit Defends Performance...
Despite a gloomy order book and a still-gloomy forecast, Boeing CEO Phil Condit recently assured shareholders the company is on the right track. It's no secret that rival Airbus is edging out Boeing in the commercial aircraft manufacturing sector. Many predications call for Airbus to beat our Boeing in sales this year. However, Condit told a shareholders' meeting that Boeing is still strong due to its diversification into the defense and space sectors. Condit said current data still show Boeing is on track to deliver 280 airliners after shipping 71 in the first quarter. The wars in Iraq and Afghanistan have been good for business and no one else seems to match Boeing's posture in the military market. Airbus is struggling in this sector and recently lost some orders for its long-awaited A400M. Last year, Germany cut its orders to 60 from 72 and Portugal canceled its three orders of the $80 million aircraft, which has been under development for 20 years. Meanwhile, Boeing is on the attack in Airbus's home turf and is talking to France, Sweden, Norway, Germany, and NATO about orders of C-17s or 767 refueling tankers, said Chris Raymond, Boeing's manager of business development for those programs.
...As 1Q Losses Nearly Largest In History
Condit's note of confidence belies the company's financial performance. Boeing last week reported a fourth straight drop in quarterly revenue, and sales in Europe have plunged 35 percent in two years amid a slump in commercial air travel. To cope with the decline in demand from commercial airlines since 9/11, Boeing has eliminated 30,000 jobs and halved jet production. Boeing shares have plunged 37 percent since the Sept. 11, 2001, terrorist attacks that sent the aviation sector into an unprecedented downturn. To add insult to injury, J.P. Morgan Securities downgraded Boeing to underweight, noting that the Commercial Airplanes unit was highly dependent on Asian carriers for deliveries, noting that they are increasingly affected by SARS. At the shareholders' meeting, Condit downplayed the significance of SARS on the company's future prospects since the disease is still contained in a few cities. "Obviously if this becomes a global epidemic, it's a big deal," he said. "Clearly right now, it is the classic reaction to the unknown that is sidelining travelers."