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Midwest Express Keep Jet Options Open

Thu Dec 06, 2001 3:30 pm

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.

Flown: A319/320/321,A332/3,A343/346, A380,AT4,AT7,B732/3/4/5/7/8/9,B742/4,B762/763,B772/77W,CR2/7/9/K,ER3/4,E70/75/90/95, F50/70/100,M11,L15,SF3,S20, AR8/1, 142/143,...
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Joined: Wed Nov 21, 2001 8:04 am

RE: Midwest Express Keep Jet Options Open

Thu Dec 06, 2001 3:37 pm

MidEx are desperately short of cash at the moment and I can understand Boeing not wanting to keep the 717 line open longer than they need to, especially since they want to take just 2 deliveries a year from 2003 to 2008.

Considering the amount of 737-200's out there still flying worldwide, I am amazed the 717 is not selling better than it has been.
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Joined: Fri Nov 09, 2001 10:51 am

RE: Midwest Express Keep Jet Options Open

Thu Dec 06, 2001 6:03 pm

In my opinion Midwest Express will definitly buy the 717 and with the words of Mr. O'Reilly they put some pressure on Boeing.
Tomorrow the workers of Boeing LGB will have a rally to save the 717 and their jobs. It seems to me that the pressure on Boeing will become every day a little harder. There is only one way for Boeing: Keep the 717 line open!!!!
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Joined: Mon Aug 23, 1999 5:35 am

RE: Midwest Express Keep Jet Options Open

Thu Dec 06, 2001 6:17 pm

As far as I understand the article MidWest is already in -at least - preliminary talks with the other manufacturers. That Boeing still does not list their order on thier website and just yesterday the head of the Boeing Commercial Group told the press still about having only 137+125 orders for the B717-200 makes me really sceptical about the B717´s future. The article states clearly that Boeing has enough order to run the production till early 2003 - but that was it then without new orders. Taking only 2 B717s does not really make sense keeping the line open, especially not when it is the only line in the plant. But we had this discussion in the last days several times so there is no real need to discuss it much further...

Flown: A319/320/321,A332/3,A343/346, A380,AT4,AT7,B732/3/4/5/7/8/9,B742/4,B762/763,B772/77W,CR2/7/9/K,ER3/4,E70/75/90/95, F50/70/100,M11,L15,SF3,S20, AR8/1, 142/143,...

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