Midwest Express Keep Jet Options Open
SEATTLE (Reuters) - With its order for 20 Boeing Co. (NYSE:BA - news) jets in question, Midwest Express Airlines (NYSE:MEH - news) on Wednesday said it was looking at other options, including taking aircraft from European planemaker Airbus SAS ARBU.UL.
Chicago-based Boeing could decide as early as this month to shut down its slow-selling 717 jet line, leaving Midwest Express to look elsewhere for the 20 aircraft it had ordered for delivery from 2003 to 2008, plus options for 30 more.
``We are looking at what all of our options are should the (717) program be canceled. It's kind of in Boeing's court to make clear what the heck they are going to do,'' Midwest Express Treasurer Dennis O'Reilly told Reuters by telephone.
Milwaukee-based Midwest Express, which would likely lease the 717s from Boeing's financing arm, Boeing Capital Corp., could switch from the 106-seat 717 to the 107-seat A318, which Airbus is readying for initial deliveries.
``The A318 is certainly an alternative for us and the (100-seat) 928JET from Fairchild Dornier is a possibility, or we could acquire used airplanes,'' O'Reilly said, citing the slightly larger MD-80 as one option.
Midwest Express' sister regional carrier, Skyway Airlines, already operates eight 32-seat 328JETs and has more on order. The mainline carrier also operates aging DC-9s, which the 717 was designed to replace.
Boeing lists a backlog of just 53 717 orders, which could keep the Long Beach, California, 717 plant running into 2003, but not much further without additional orders. Curiously, Boeing has not posted the Midwest Express order on its Web site.
Midwest Express officials have talked with Boeing by phone, but currently no meetings are scheduled to discuss the 717, O'Reilly said.
A popular rumor has AMR Corp. (NYSE:AMR - news) returning 20 717s ordered by TWA, which AMR bought earlier this year, to Boeing, which could then supply them on lease to Midwest Express.
``You never know. That certainly is a possibility. But until the Boeing Company shows its hand more clearly, we are going to move ahead according to our plan,'' O'Reilly said.
O'Reilly declined to discuss details of the 717 contract with Boeing, though he noted it included language that would require Boeing to pay financial penalties or help provide alternative equipment if it cancels the 717.
``Certainly there are alternatives that exist,'' O'Reilly said. ``We would think that talking to other manufacturers now would work in our favor, given the nature of the industry today.''
Many airlines are teetering near bankruptcy and have pushed back scores of deliveries, in some cases by several years, from Boeing, Airbus and regional jet-makers.
Airlines have been hammered as travel has shriveled and operating costs have risen in the wake of the Sept. 11 hijack attacks.