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Wednesday, August 26, 1998 Published at 13:52 GMT 14:52 UK


Business: The Company File

Politics before planes

British Airways has left Boeing in the lurch

When it comes to making planes, Boeing thinks of itself as number one.


John Mance, Aviation Analyst sees major differences between the manufacturers
It has been in the business since 1916 and with more than 8,000 planes in the air it has had the lion's share of the market.

At the top end Boeing still reigns supreme. The Jumbo jet 747 costs $150m and stands without rival.

But further down the scale the competition is intense.


[ image: The Boeing 747 remains unrivalled]
The Boeing 747 remains unrivalled
Boeing and Airbus go head to head on just about every other aircraft.

The BA defection could not have come at a worse time.

Last year Boeing had to close down a production line because over-production led to slump in quality.

Badly hit

Putting it right has cost hundreds of millions of dollars and pushed the company to report its first loss in 50 years.

Boeing has also been badly hit the economic crisis in Asia. Many carriers in the regions have cancelled or delayed their orders, because they cannot fill their planes.


[ image: Many Asian airlines are unable to pay for orders]
Many Asian airlines are unable to pay for orders
The evidence of Boeing's problems can be seen most clearly from the flight line where the planes are readied for delivery.

Out of 14 planes, eight belong to Asian carriers. They were all ordered in good economic times.

Now the planes have been built, but the carriers are unable to pay for them.

Difficult times

Boeing spokesman Jo Ozemak says these are difficult times for airlines.

"Clearly we go to extraordinary lengths to work with them to make sure that five years, 10 years, 15 years from now they're still here to buy airplanes."

With the planes in storage and debts unpaid it has all led Boeing to retrench in a big way.

Job losses

Three weeks ago the company confirmed plans for 30,000 job losses as part of its effort to cut costs.


Real Video: BBC Business Correspondent Richard Quest has brunch with disgruntled Boeing workers
For those that work at Boeing these are worrying times.

Many Boeing worker believe that subsidies and support from European governments give Airbus an unfair edge.

Small beer

Boeing will have taken some comfort in the increased orders for British Airway's 777s and the fact that it will still be the only supplier of long range jets.

But that is small beer to losing out long-term in a crucial sector of the market.

And whatever the public comment may be, in Seattle they believe BA has put politics before planes.



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