=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2003/04/03/f= inancial0118EST0007.DTL ---------------------------------------------------------------------- Thursday, April 3, 2003 (AP) Airline bankruptcy filings, war, SARS threaten Boeing's outlook HELEN JUNG, AP Business Writer (04-03) 22:18 PST SEATTLE (AP) -- With a war in Iraq, a worldwide disease outbreak and airline bankruptcy filings, there's not a lot of optimism these days in aerospace. The newest problems may translate into even deeper job cuts and fewer plane deliveries for Boeing Co., the world's largest commercial jet manufacturer, as wave after wave of bad news slams the aviation industry. "This is turning into such an incredible perfect storm," said Richard Aboulafia, an aerospace analyst with the Teal Group. Then he amended his description: "This is a satire of the perfect storm." Boeing, which builds most of its commercial jets in factories near Seattle, projects deliveries of 280 jets this year, and between 275-300 deliveries in 2004. Those would be the fewest since 1996, when Boeing delivered 271 jets. With the airline industry heavily damaged after the 2001 terrorist attacks, Boeing slashed 30,000 jobs by the end of 2002. The Chicago-based company then said it would eliminate another 5,000 positions, mostly in the commercial airplane group, by the end of 2003. That forecast could worsen, depending on how severely the war, continuing economic troubles and the outbreak of severe acute respiratory syndrome affect airlines, already struggling to stay in business, said Boeing spokesman Peter Conte. Boeing had expected 2003 to mark the beginning of a recovery in the numb= er of airplane orders, with airplane deliveries to start to rebound next year, Conte said Thursday. "We're leaving open the possibility that we may end up having to change that overall recovery outlook," Conte said. "Our whole production level, our employment level, the industry outlook is depending on what is transpiring right now." The bad news just keeps coming, analysts said. "Every time you think that it's bottoming out and can't get any worse, it seems to get worse," said Scott Hamilton, an independent aerospace analyst based outside Seattle. When Boeing issued an updated forecast in January, the company had factored in a continuing shakeout in the airline industry as well as a brief conflict with Iraq, lasting two or three months. Since then, the United States began war in Iraq, airlines' domestic and international bookings have plummeted, Hawaiian Airlines filed for Chapter 11 bankruptcy protection, and the economy remains weak. Financially strapped American Airlines narrowly averted a bankruptcy filing, securing labor concessions from its work force that kept it out of Chapter 11 for now. United Airlines filed for bankruptcy protection late last year and analysts fear other airlines will follow. Then came the outbreak of SARS. The flu-like illness has killed at least 80 people, mostly in Asia, and sickened at least 2,200 in more than a dozen nations as infected travelers spread the disease with air travel. As far as deliveries, the impacts won't be felt this year as much as next year, said Paul Nisbet, an analyst with JSA Research. But he said he would not be surprised if Boeing had to lower its delivery targets for 2004. Meeting targets this year only means more pain later, said Aboulafia, who said it's likely Boeing will face additional layoffs as it tries to protect its profitability. "Every plane they deliver in '03 comes out of '04 or '05," Aboulafia sai= d. ^On the Net: www.boeing.com =20 ---------------------------------------------------------------------- Copyright 2003 AP