Airlines in Asia Might Postpone Boeing Deliveries

Boeing Co. on Monday said Asian airlines may delay taking delivery of as many as 60 jetliners over the next three years because the region’s economic problems are slowing growth in air travel.

Boeing’s statement came as the United Nations issued a report saying the crisis battering Asian economies may well harm growth prospects next year in the United States and Europe.

The report forecasts moderate economic growth of 2.6% in Western Europe this year and 3.7% in the United States and Canada, with continuing stagnation in Japan. But it cautioned that the near-term outlook for the global economy “is now surrounded by a large margin of uncertainty on account of the turbulence” in financial markets.

“The crisis is not over yet,” the report said.

Meanwhile Monday, the International Monetary Fund approved the release of $810 million for Thailand, the second IMF payment in a $17.2-billion international bailout.

IMF Managing Director Michel Camdessus said Thailand had made “solid progress” in implementing a reform package agreed to earlier this year.

The Thai government, acting just before an IMF deadline, said that 56 of 58 already-suspended financial institutions would be closed, although some might be merged into a handful of commercial banks.

Separately, South Korea’s fourth-largest conglomerate, Daewoo Group, said it would take over Ssangyong Motor Co., but the total purchase price was still under discussion. Daewoo Group’s Daewoo Motor Co. said it would assume $1.64 billion of Ssangyong’s estimated total debt of $2.8 billion.

The Daewoo Group has a record of turning ailing companies around after takeovers, including its shipbuilding and car-making units.

Meanwhile, two troubled South Korean commercial banks, Seoulbank and Korea First Bank, said the government would take a majority share of their equity, a move that may presage their merger or acquisition.

For Boeing, the world’s biggest aircraft maker, the problems in Asia could force it to delay as many as 20 Asian deliveries a year through 2000, said Gordon McHenry, director of airline industry analysis for Boeing. But that’s not a lot of planes for Boeing, which expects to deliver 550 planes worldwide next year, McHenry said.

Delivery delays could have a silver lining if they give Boeing more time to tackle assembly-line problems caused by efforts to double production over 18 months.

“This would be good news if I had a high degree of confidence that this is all it’s going to entail,” said Peter Jacobs, an analyst with Ragen MacKenzie. “The reality is that no one knows what news is going to come out of the region tomorrow.”

However, the Asian crisis would not be good for Boeing over the long term if it hurts sales. Asian airlines are expected to be among the biggest buyers of jetliners over the next few years and to account for one-third of Boeing’s order backlog. China alone is expected to order 1,900 aircraft from Boeing over the next 20 years.

“It’s hard to find a silver lining if our customers are suffering,” McHenry said.

McHenry said no Asian airline has canceled or asked for a delayed delivery as yet. Boeing has orders from airlines in South Korea, Malaysia, Thailand, Indonesia, the Philippines and Japan.

McHenry declined to comment on reports that specific airlines, including Malaysian Airlines System and Cathay Pacific Airways, had requested delivery delays.

Boeing has said that Asian airlines, their purchasing power sapped by a currency crisis, welcomed the Seattle company’s own plans to delay deliveries because of production problems.

In October, Boeing reported a third-quarter loss of $696 billion after taking a $1-billion charge to cover assembly-line problems. The company has struggled with parts shortages and expensive efforts to hire and train a flood of new employees as it tries to double its output in less than two years. The problems caused temporary slowdowns on some of its assembly lines.

Boeing shares fell 94 cents to close at $51.44 on the New York Stock Exchange.