Douglas Makes Most of Rosy Market


McDonnell Douglas President and CEO Harry Stonecipher presented a stoic posture during a press conference at today's Farnborough Int'l Air Show.

Stonecipher began with comparisons to the company's position at the '94 Farnborough show. In financial performance, he stated that if the company does as well in the 2nd half of 1996 as it did in the 1st, it will do $200M more than in 1994.

And, pointing to forecasts for future aircraft demand Stonecipher said, "If we weren't already in the commercial aircraft business, we'd get in it."

Stonecipher also stated the company's top priority is to win the Joint Strike Fighter program. The team with McDonnell Douglas includes partners Northrop Grumman and British Aerospace.

He admitted that McDonnell Douglas faces a stiff challenge to win back market share from Boeing and Airbus in the commercial market.

Michael Sears, president of Douglas Aircraft Company, also called on Douglas' rich history, but pointed to the future market for aircraft. The company forecasts a market demand of 13,544 aircraft through 2014, a $1.1 trillion market.

Sears announced new commercial orders worth $700M at the show, including two new MD-11 orders and thirteen of the company's popular MD-80, of which over 1100 have been delivered to-date. And, he said that having lost ground from Number 1 to Number 3, it would not be quick or easy to return to prominence in the commercial arena.

Stonecipher's vision for the future of McDonnell Douglas is to create a single company with an aerospace focus. An example cited by Sears is the MD-XX, currently under feasibility studies by DAC. Sears claims that the 300+ seat class aircraft will not be a DAC plane, but instead will be a MDC/DAC product. It's unclear how that differs from the current organizational structure, other than a perhaps subtle philosophical difference.

The MD-XX, still has not received MD board approval to proceed with the program, but Douglas has received six letters of interest from airlines representing a potential for 40 aircraft at launch.

Douglas also wants to produce more aircraft in the 100-150 seat class, with the re-winged MD-90 leading the way. Still, Sears admitted the company has no vision for how to close the gap in its "family" between 150 and 300 seat aircraft.

Stonecipher said the company is "not prepared to join the Airbus A3XX consortium." Douglas does not believe there's sufficient market for such a large capacity aircraft although Douglas' forecast for the Big Birds is rosier than Boeing's. As Stonecipher said, "Boeing and Airbus see that market differently than we do. That's what makes a horse race."

While all that may be true, this particular horse is still slow to the gate and despite the pronouncements of its jockey, it may not be in a photofinish anytime soon.


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