The signing last week of the first major airline customer for Boeing Co.'s 717 short-hop jet Trans World Airlines Inc., which placed 50 orders for the new plane has buoyed hopes at the aerospace giant that other buyers will now follow suit.
But will they?
Analysts and other industry observers note that the market for an airplane the size of the 717, which seats about 100 passengers, is small, especially in the United States. Aside from TWA, only one major U.S. airline, Northwest Airlines Inc., maintains a large fleet of jetliners of a similar size and it is unclear if and when Northwest, which has seen its earnings plunge, will choose to replace them with 717s.
Aside from Northwest and TWA, no major U.S. airlines have a large fleet of DC-9s the predecessor to the 717, which Boeing inherited from McDonnell Douglas Corp. when it bought the company last year. Owners of DC-9s are considered likely customers for 717s, given their similar size and the fact that many DC-9s are more than 20 years old.
The 717's future is critical for L.A.'s aerospace industry. While four commercial jetliners the MD-11, the MD-80, the MD-90 and the 717 are all assembled at the former Douglas Aircraft facility in Long Beach, only the 717 will remain after 2000, because Boeing is phasing out the other three jets.
About 6,400 employees at the Long Beach plant work on the MD-11, MD-80 and MD-90 programs. While the 717 program, which employs about 1,800 workers, is not expected to fully replace those jobs, it could offset some losses particularly if there is a large demand for the new plane.
But it's questionable whether that demand will emerge. Many airlines including UAL Corp.'s United Airlines and AMR Corp.'s American Airlines, the two largest airlines in the United States have chosen to limit the types of planes they use to larger jets and smaller, 50- or 70-seat planes.
"My feeling is that a regional jet at 70 seats is a more effective way for an airline to go, as far as serving short-haul markets," said Stephen Klein, an analyst for S & P; Equity Group. "So it remains to be seen whether this (the 717) makes any sense."
Indeed, several carriers seem to prefer using planes smaller than the 717 for regional service.
"Right now (the 717) is not really something we're looking at," said UAL spokesman Matt Triaca, whose company mostly uses Boeing's larger 737s and Bombardier's 50-seaters. "We don't really see a fit for the 717 right now."
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