The Pacific Rim region is smiling on the Boeing Commercial Airplane Company these days. Boeing scored two important sales victories in Asia in quick succession late last year. It gave the company a welcome lift.
First was the surprise decision by Thai International Airways to switch its order for two new airplanes from Airbus Industrie, the European consortium, to Boeing. Not only was it the first new order for a Boeing 767 since the plane was first rolled out in August 1981, it was the first time an airline had canceled an Airbus order and replaced it with one from Boeing.
Shortly thereafter, the People's Republic of China announced it was buying 10 new 737 jetliners and two additional 747s to modernize its domestic airlines and strengthen its international flights. Unlike the Thai deal, this one was not unexpected, but it was a reminder that China has a large inventory of aging air transports, many propeller-driven, that will have to be replaced in the not-too-distant future.
These two events are significant because Asia is crucial to Boeing's plans to weather lean years ahead until national and world economies recover and sales of its new line of jetliners pick up.
(Another element in Boeing's planning is a careful reduction in the company's work force. Boeing's year-end employment in the Seattle area was about 67,000, down about 8,900 from the beginning of the year. The company plans to reduce this figure by another 9,000 this year.)
Asia is the world's third-largest market for commercial airplanes after the United States and Europe, and the region still has expanding economies that project a need for more air travel. It is also a primary arena of competition between American aerospace companies and Airbus.
In fact, until Thai Airways decided to switch to Boeing, Airbus Industrie had been on a winning streak among the countries of Southern Asia.
As of this writing the Thai deal is not final. Although approved by the airline, it must still be ratified by the Thai government. Airbus is pulling out stops to save the deal, including lowering the price by $10 million a plane. This will undercut Boeing's price.