Boeing 767 Everett line likely safe for this year

LE BOURGET, France -- The Boeing Co. is seeing enough interest from airlines in the 767 that it probably will not need to decide this year on ending production of the plane, Alan Mulally, chief executive of Boeing's jetliner business, disclosed yesterday.

"Right now, we don't anticipate having to make that decision this year," Mulally said in an interview at the Paris Air Show.

Boeing had been expected to make an announcement on the fate of the 767 by mid- to late summer.

Just a few months ago, that plane, as well as the 747, looked to be on the endangered list. Both are built in Everett, along with the 777.

But Boeing is likely to go ahead with development of a bigger 747, though no decision has been made. Mulally said there is growing interest from airlines in both the freighter and passenger versions of the 747 Advanced. The passenger plane would have about 30 more seats than the current 747-400

Boeing has another 24 747-400s left to build, and Mulally hinted at additional 747-400 orders that would allow for continued production until the new model comes along, probably in 2008 or 2009. The 747 Advanced would be a stretch of the existing 747-400, with the engines being developed by General Electric for the 787.

Boeing Chairman Lewis Platt had said at the air show this past weekend that the board would discuss the 747 Advanced at its next meeting at the end of the month, though it is not clear when the board might actually give the OK to launch development of the plane.

So far this year, five previous 747-400 orders have been canceled, but Boeing has won two additional orders, for a net loss of three planes.

It's a similar story for the 767. Customers have canceled four previous 767 orders this year, and Boeing has won three new orders, for a net loss of one 767. Boeing had 20 767s left to build at the end of May.

Mulally said Boeing is seeing "continued interest" in the 767 from airlines that want to buy more as a replacement for older planes, for growth and as a bridge to the 787, which is scheduled to enter service in mid-2008.

He did not say how soon Boeing might announce additional 767 orders.

Eventually, the 787 will replace the 767.

But delaying a decision on ending production of the 767 buys Boeing more time while the Pentagon considers what to do about tankers for the Air Force.

Boeing had a $23 billion deal with the Air Force to build 100 767 tankers, but it was killed by Congress last year as a result of a military procurement scandal at Boeing. A decision by the Pentagon on how to proceed isn't likely until later this year.

On another issue, Mulally had little to say about the company's ongoing search for a new chief executive to replace Harry Stonecipher, who was asked to resign in March because of an affair with a female executive.

Mulally and Jim Albaugh, who heads Boeing's defense and space business, are the two internal candidates being considered by the board for the top Boeing job. The board is also looking at a handful of outside candidates.

Some industry analysts have speculated that Mulally, who turns 60 in August -- five years from Boeing's mandatory retirement age for executives -- would likely leave Boeing at some point before retirement if he does not get the chief executive job.

Mulally would not be drawn into that kind of discussion in the interview.

He said that when Platt called him to say that Stonecipher was leaving, he told Platt: "You can absolutely count on me."

"I love Boeing," Mulally said. "I don't have any plans. I want The Boeing Co. to be strong ... because I love this place and what we do."

Platt has refused to speculate on how much longer the search for a chief executive will take.

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