Boeing Gets Critical Boost For Its Two-Engine 777 Jet
FAA gives new aircraft approval for cross-ocean flights
SEATTLE — THE Boeing Company is moving confidently toward a hoped-for upturn in jetliner sales.
With clockwork precision, the Seattle manufacturer got the go-ahead Tuesday for its new 777 airplane to do cross-ocean flights just in time for it to enter service next week. United Airlines, the plane's first customer, plans to inaugurate passenger service June 7 with a London-Washinton,
Traditionally, planes with only two engines have had to fly two years of commercial service before the Federal Aviation Administration grants certification for flying up to three hours away from an airport. From the start, Boeing aimed to win FAA approval for ''extended twin-jet operations,'' or ETOPS, for the 777 before it even went into commercial operation. Approval means the FAA figures the aircraft can fly safely for three hours on a single engine should one engine fail.
At a time when buyers of commercial aircraft are few and far between, the certification gives Boeing what could be a critical boost in its race with the European consortium Airbus Industrie. Boeing's overall market share is about 60 percent, but Airbus recently said it wants half the market for itself.
''Like water building up behind a dam,'' there are signs that the airline industry will need to begin a new ordering cycle for new aircraft to meet long-term demand, says Paul Nisbet, an analyst with JSA Research in Newport, R.I. He sees the 777 as a star of the next industry boom, competing fiercely with Airbus.
The 777 is aimed at the high-end of the market, as a large-capacity, long-distance jet. Had Boeing not won the unprecedented early certification, the plane would have been much harder to sell over the next two years, says Bill Whitlow, an analyst with Pacific Crest Securities in Seattle.
''The fastest growth is in the Pacific and transpacific,'' Mr. Whitlow says. ''ETOPS opens that market. No ETOPS closes that market.''
Though European destinations can be reached from the United States without venturing three hours from an airport (flights can be routed near Goose Bay, Labrador, or Iceland), the certification helps there as well.
To win the victory, Boeing had to undergo what is probably the most rigorous testing regime of any plane in history. In the last year, a test 777 has made 1,000 flights.
Despite its coup, Boeing still has plenty of hurdles to cross to win customers for the airplane, which cost $4 billion to develop:
* The certification only covers planes using Pratt & Whitney engines. Approval for General Electric and Rolls Royce engines is expected over the course of the next year. The enginemakers had to develop new high-powered engines to meet Boeing's goals for twin-engine, long-range flying.
* Europe's Joint Aviation Administration has not yet given cross-ocean certification to Boeing. That will be important if European airlines are to buy the plane. The FAA approval allows American carriers to fly to and from Europe.
* The market is still at a cyclical low point. Boeing has cut production by about 50 percent since its peak in 1992, following a late-1980s order boom. ''We are bouncing along the bottom,'' says Ron Woodard, president of Boeing's commercial airplane group.
* The 777 itself has plenty of competition. In the wide body category, Airbus makes the A-330 and A-340, McDonnell Douglas Corporation in St. Louis makes the MD-11, and Boeing makes the 747 and 767, which are larger and smaller, respectively, than the 777.
Though entering the market as a relative latecomer, the 777 has an important advantage: cost. Its competitors generally have three or four engines, meaning they use more fuel. But so far, these planes can also fly farther. So in 18 months, Boeing will begin delivering a ''B'' version of the 777 with longer range, so it can go head-to-head with the A-340 and MD-11. The A-330 is also a twin jet.
''How can we cut ownership costs so they can buy more planes?'' Mr. Woodard asks. ''That's what the whole struggle is about in our business right now.'' The 777 tries to meet that challenge in a host of ways. Designed with lots of input from United and other airlines, the 777 can be easily and quickly reconfigured with different passenger classes, rather then spending days on the ground while seats are moved around.
So far, Airbus has won 260 orders for the A-330 and A-340 combined. The 777, launched in 1990, two years after those airplanes, has 144 orders.
Some pilots and passenger groups have criticized the quick ETOPS approval for the 777. But the International Airline Passengers Association says Boeing has satisfied its concerns.
Still remaining are less serious hurdles. For instance, United has been having trouble getting the plane's interactive video system, supplied to Boeing from an outside vendor, to work. The system provides each passenger with a movie, game, and information screen at their seat.