Kuala Lumpur, Feb 14: The head of Boeing Co said on Saturday that Asia's financial difficulties might delay airplane deliveries over the next three years but would have no long-term impact on the US aerospace giant's business.Boeing chairman Phil Condit told a news conference in the Malaysian capital that a trip to Asia had boosted his confidence in the region's capacity to recover from a financial crisis that has cast a shadow over its economic prospects.
"My confidence, if anything, is higher," he said after signing a 153 million ringgit ($40 million) agreement to set up a joint composite parts factory with Hexcel Corp, Malaysia Helicopter Services Bhd and Sime Darby Bhd.
Condit said Boeing's investment in the joint venture, which will make composite parts for secondary structures for Boeing commercial aircraft and eventually other customers, underscored the firm's commitment to Malaysia and Asia. "Together we can weather what is a local storm," he said. Prime Minister Mahathir Mohamad witnessed thejoint venture signing. "What is happening in Malaysia today will not last forever," he said, referring to the slowdown and financial turmoil that have battered both the ringgit and local shares. "We can make adjustments and I am quite sure that businesses of a long-term nature will eventually find they not only survive but succeed," Mahathir said.
"I hope the haze in the financial world as well as the other haze will disappear," the prime minister said, referring to smoke from forest fires in neighbouring Indonesia last year that covered much of Southeast Asia in smog.
Last month Boeing said it expected to deliver 60 fewer airplanes than previously forecast to Asian customers over the next three years due to the region's economic woes.
Boeing said it expected the crisis mainly to affect deliveries of wide-body 747 and 777 jets in 1999 and 2000.
Philippines Airlines last month moved to cancel four 747-400s and some analysts believe more cancellations or deferals could come from other regionalcarriers.
Condit was asked to comment on Boeing's assessment now that he had visited Indonesia and Malaysia this week.
"The visit has been very positive. Any airline must adjust to current traffic situations. So we may see some airplanes move just to adjust to the current conditions," he said.
"But my fundamental assessment has not changed, and when we talked about the 60 airplanes, that was a macro look at the economic impact, and really was a delay over the next three years. But long term we don't see any diminution at all."
The chairman of Malaysian Airline System Bhd told Reuters after the news conference that his airline would not cancel aircraft orders due to the economic slowdown.
"Those aircraft that we have, the older aircraft that we have, we may be selling some of them, or maybe lease out some of them," Tajudin Ramli said. Malaysia Helicopter Services has a 29.5 per cent stake in National carrier Malaysian Airline.
Each of the four joint venture partners will hold equal stakes inthe composite parts company, called Asian Composites Manufacturing Sdn Bhd. The factory will be located on a 31-acre site in northern Kedah state.
Malaysian Airline not to cancel orders
Malaysian Airline System Bhd will not cancel aircraft orders due to the economic slowdown, chairman Tajudin Ramli said on Saturday.
Tajudin told Reuters after a news conference to announce a composite parts joint venture with Boeing Co and Hexcel Corp that Malaysian Airline may sell some of its older aircraft or lease them to other companies. Asked if his airline would cancel plane orders due to the economic downturn, Tajudin said: "We don't cancel our orders. We are not cancelling orders."
He was asked if Malaysian Airline planned to defer delivery of some scheduled purchases. "We are discussing with Boeing right now. I cannot give you any specifics," he said.
"Those aircraft that we have, the older aircraft that we have, we may be selling some of them, or maybe leaseout some of them," he said. "So we are taking a number of steps, and this will be a composite of maybe 18, 20 processes together."
As of March 31, 1997, Malaysia Airlines was operating 82 aircraft and leasing another 14 to third parties. The average age of the aircraft was 4.1 years. A Malaysia Airlines official said the company might make an announcement regarding aircraft purchases in coming days.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
