UAL, BOEING Agree To Restructure Deliveries

From:         Stephen L Nicoud <stephen@boeing.com>
Organization: Boeing Computer Services Research & Technology, Bellevue, WA USA
Date:         08 Apr 93 15:38:01 PDT
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BOEING MANAGEMENT INFORMATION BULLETIN

93-33    4-8-93

UAL, BOEING AGREE TO RESTRUCTURE DELIVERIES

United Airlines and Boeing have agreed to restructure United's orders while
ensuring the launch of the 777 as planned.  The restructuring will not
change airplane production and employment rates set earlier this year.

"When we set those rates, we took into account our ongoing discussions with
United and others," said Dean Thornton, president of Boeing Commercial
Airplane Group.  "We wanted to cover all of them with one adjustment, and
we did."

In the agreement, 49 United orders, listed at $2.7 billion, will be
reclassified as purchase options.  However, United will forfeit significant
security deposits if it chooses not to take delivery of the aircraft before
the year 2000.

The agreement is designed to help United strengthen its financial position
by significantly reducing its near-term obligations to buy airplanes.  At
the same time, Boeing stays strongly positioned to deliver more airplanes
to United over the long term, when the carrier's financial strength returns.

"It's in our best interest to help our customers regain their financial
health," Thornton said.  "We have faith in the future of our industry, and
in United's place in it.  When prosperity returns to the airline industry
in the next few years, United will be well positioned to accept new Boeing
airplanes."

The 49 airplanes included in the agreement comprise all Boeing models
currently in production, except for the 777.  United's orders for the 777
remain at 34 with 34 options.  The airline will take delivery of the first
777 in May 1995 and 10 more by the end of 1995.

United and Boeing have agreed to modify the carrier's 1996 deliveries for
the 777.  Four "A" model 777s, developed for routes up to 5,000 miles, will
be converted to longer-range "B" models, two for delivery in 1998 and two
in 1999.

The 49 airplanes covered by the agreement are:

        UAL ORDERS
MODEL   CONVERTED

737        31
747         8
757         2
767         8

Boeing's commercial airplane backlog totaled $82.6 billion at the end of
1992.