Up, Up and Away

By Janice Castro

As millions of air travelers embark on holiday flights this week, some of them will be flying on jetliners fresh off the assembly line. And in the near future more and more passengers will be boarding shiny new planes, because the three big commercial-aircraft builders -- Boeing, McDonnell Douglas and Europe's Airbus -- have been enjoying a Christmas-style sales rush all year long. Airlines around the world, spurred by growing passenger volume and the need to replace hundreds of aging 1960s-era jets, have embarked on an unprecedented shopping spree, ordering more than 976 new jets worth a record $43 billion so far in 1988.

For passengers, the buying binge will mean bigger, quieter and more comfortable planes. Airlines, for their part, will save on operating costs with the new fuel-efficient jets, which feature advanced computerized flight systems. With so many airplanes to build, though, the booming aerospace companies will face some fresh concerns: how to meet their delivery schedules and still ensure that their quality control does not slip.

The backlog of airliner orders already totals 1,102 at Boeing, 555 at Airbus and 320 at Douglas. A carrier that orders a jet today will have to wait as long as three years for delivery. Phoenix-based America West Airlines, which ordered 25 Boeing 737s and 757s last week, will take delivery of the first one in 1992. The jet-building boom may well last a decade or more. One Douglas study estimates that 2,500 commercial airliners -- 40% of the world's commercial-jet fleet of 6,200 planes -- will be retired during the next 15 $ years.

Air carriers need the planes to keep up with worldwide passenger travel, which is growing some 7% a year and backing up taxiways at airports from Hong Kong to Dallas. To cope with the crowding, carriers are buying larger aircraft, reducing the number of individual flights. A new midrange Boeing 767, which carries as many as 260 travelers, can replace two smaller 727s or Douglas DC-9s.

At the same time, airlines have increased their vigilance against the danger of overstressed, older planes since an incident last April, when the fuselage of a 1969-vintage Aloha Airlines 737 peeled open at 24,000 ft. The average age of the 5,253 planes in the U.S. fleet is 14 years; some 43% of jets were built more than 20 years ago. Another shopping incentive for U.S. carriers: tighter noise regulations. The newest jets are as much as 30% quieter than their predecessors.

The resulting frenzy of plane ordering this year should bring a long-running bonanza for all three airliner builders:

BOEING. Nearly every day, a silvery aluminum-skinned Boeing airliner rolls out of one of the company's four giant hangars in suburban Seattle and is sprayed with the colors of its new owner: red and blue for American, yellow and blue for Lufthansa, emerald green for Aer Lingus. The world's largest aircraft manufacturer (a record $29 billion in orders this year, up from $20 billion in 1987) is stepping up production, from 25 jetliners a month to 32.

Airlines using hub-and-spoke route patterns have made Boeing's medium-range 737, which has a passenger capacity of 146, the best-selling airliner in history. More than 1,600 are now flown by 141 airlines, and 600 more are on order at a base price of $20 million each. For longer and more heavily traveled routes, carriers are buying twin-engine 757s, which cost about $40 million and carry as many as 220 passengers, and the larger 767s ($58 million). The big-money behemoth of the line is Boeing's 747 jumbo jet ($135 million), for which the manufacturer has 172 orders.

AIRBUS. The 18-year-old European aerospace consortium still loses money on every plane it sells, but its British, French, West German and Spanish co- owners have been willing to subsidize costs in order to develop a robust European aircraft industry. Airbus is eclipsing Douglas as the world's second largest jetmaker. One reason: the manufacturer outfits its jet cockpits with advanced flight-control systems that are not yet available on most U.S.-made , airliners. By constantly monitoring flight conditions, the Airbus onboard computers help cut maintenance and fuel costs.

Airlines have bought 176 of the consortium's A310 wide bodies ($59 million; 218 passengers) since 1983, and 86 of the larger, twin-engine A300-600s ($68 million; 267 passengers). The hottest-selling Airbus jet is the medium-range A320, the first commercial airliner in which the cockpit is connected to flaps and rudders strictly by computer rather than by hydraulic or mechanical means. More than 400 of the planes have been ordered. (The crash of an Air France A320 during a demonstration flight last June was not the result of any flaw in the aircraft, investigators concluded.)

McDONNELL DOUGLAS. As a result of the buying binge, Douglas has added a million square feet of factory space to its 7 million-sq.-ft. commercial- jetliner division in Long Beach, Calif. The only Douglas product available at the moment is a medium-range workhorse called the MD-80 ($27 million; 150 passengers), an updated version of its venerable twin-engine DC-9. Douglas has delivered 553 of the newer model to some 41 airlines, and has orders for 275 more. The company is helping build a similar jet, the MD-82, in Shanghai. China's state airline, CAAC, plans to use the aircraft on its domestic routes. Under a $600 million licensing agreement with the Chinese government, the California firm is providing the parts for 25 of the jets.

The plane-ordering boom has ensured enough orders for the takeoff of the company's once doubtful MD-11. A longer and more fuel-efficient version of the company's phased-out DC-10 line, the $100 million MD-11 has pulled in 47 orders, and gives Douglas a rival to the larger Boeing and Airbus models.

Boeing seems assured of maintaining its dominance of the commercial-airliner market, commanding about a 60% share. As the largest exporter of U.S.-manufactured products, Boeing through its sales contributes not only to Washington State's economy but to the U.S. trade position as well. Foreign airlines have placed some 60%, or $50 billion worth, of the company's current order backlog.

Despite their bright prospects, the three manufacturers have been cautious about expanding their commercial production facilities in response to the orders. They know that a recession could cause a rash of order cancellations, though the volume of orders from foreign flag carriers lessens that risk. Most important is a concern that corners might be cut as production speeds up. * British Airways, Japan Air Lines and other Boeing customers have complained about sloppy work on some aircraft produced in the past three years. The company may face criminal charges in Japan because of faulty Boeing repairs that led to the 1985 crash of a Japan Air Lines 747 in which 520 passengers and crew members died.

Boeing officials insist that they have tightened quality controls. Says Richard Albrecht, Boeing vice president for sales: "You can make mistakes when you try to send out a lot of jets." In response to the complaints, he adds, "we have done a lot more training of new people than we used to do."

Particular care is necessary in building complex new airliners like the Boeing 747-400. The cockpit crew will rely on the plane's computer to monitor more than 600 gauges, digital meters and other gadgets -- more instrumentation than the space shuttle contains. But the airlines are not the only ones who will have to wait in line for their new planes. So will President-elect Bush. The new Air Force One, a 747-200, will not arrive at Andrews Air Force Base until next November, a year behind schedule.

With reporting by Edwin M. Reingold/Seattle and Christopher Redman/Paris