Re: McDonnell Douglas & Boeing To Merge -- Press Release Text

Date:         19 Dec 96 03:06:31 
From:         Steve Lacker <>
Organization: applied research laboratories
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> >It will be very interesting to see what Boeing does with the DC-9
> >line of planes
> The MD-95 is almost surely dead.


> It will be interesting to see what Boeing does about the MD-80/90.  On
> the one hand, Boeing doesn't want to compete with the 737.  But Boeing
> also doesn't want to alienate big customers by causing a huge, instant
> devaluation of their MD-80/90 fleets

I'm not sure that is a big factor really. Most airlines have purchased all
the MD-8x aircraft they plan to, so shutting down MD-8x production isn't
that big a deal. The MD-8xs out there will go on flying through their life
cycle whether or not McD belongs to Boeing or not. Does the mere fact that
they are no longer in production render them "devalued?" In fact, I would
say that the introduction of the MD-90 did more to devalue the MD-80 than
stopping MD-80 production would. Cessation of production of the 727
certainly didn't make any airline start unloading them in a hurry back in
the early 80's!

As for the MD 90- thats a different story! Since its just been being
delivered for about a year now, its in a sticky spot. Delta, for example,
has a substantial number in their fleet, and as you pointed out might not
appreciate having the plug pulled right now. Given how long Boeing
continued to trickle out the 707 airframe at a low volume of production, I
would not be surprised to see the MD-90 have a fairly "normal" life cycle,
although without any further derivatives.

On the OTHER hand... American has already committed to Boeing, with no
planned orders for the MD-90. Depending on what other airlines around the
world decide, the MD-90 "problem" may not be a problem at all...

> >I have a distinct impression that McD will loose its
> >personality/presence in the commercial airline business and that
> Seems fair to me, at least on the commercial side.  The only Douglas
> piece which *might* have some staying power is the MD-11F

With both American and Delta showing marked DISinterest in the MD-11, I
suspect that it is dead as a passenger aircraft already, and if the
commercial version of the C-17 comes on line, wouldn't it better serve the
needs of FexEx etc. than an MD-11F? Maybe not, in which case you may be
right. One thing that I would bet on heavily is that no all-new "McDonnell
Douglas" planes will be introduced. From what I can see, the airliner
business isn't like the automotive world, where Chrysler can buy AMC then
benefit from introducing a brand new Jeep years after the original company
has been absorbed. That leaves the problem, yet again, of the MD-90. Surely
it won't be re-badged as a Boeing 7-something-7, so if it is still
produced, I would expect it to go on as the last "McDonnell Douglas"
passenger aircraft made.

> (I have no idea if there have ever been any serious discussions of a
> tanker version of the MD-11.)

My impression has been that the USAF really won't be needing a tanker any
time soon. Last I read, the re-engined KC-135 is supposed to be in service
until around 2030!! If a new tanker IS required, I'd bet on a 767

Stephen Lacker
Applied Research Laboratories, The University of Texas at Austin
PO Box 8029, Austin TX 78713-8029