From: Stephen L Nicoud <email@example.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.