Flying the Skies of the Future

A record order heralds a new generation of superjets

Like competing suitors seeking the dowry of a fabled heiress, the major planemakers for months have been courting United Airlines. Salesmen from Lockheed, McDonnell Douglas, Boeing--each carrying special pleas and promises--swarmed to the company's Chicago headquarters. There was also a fascinating newcomer on the scene, the European Airbus consortium. Reason for the wooing: United, the free world's largest airline, was preparing to place the first big order for the new generation of supersophisticated jetliners on whose fleet wings air travelers will fly into the 21st century.

Last week United made its choice, and the winner was Boeing.

At a cost of $1.2 billion, United will take 30 767s, twin-engine, wide-bodied jets that so far exist only as models in a wind tunnel. The new plane, designed to fill the gap between the long-range jumbos and short-range feeder planes, will be in the air by mid-1982, carrying 197 passengers on trips of 500 to 2,200 miles. It will look like a much fatter 707 with two huge engines hanging from thinner, longer wings. Because of its advanced aerodynamics and improved engines, it will be quieter, more comfortable and some 35% cheaper to operate than the present generation of aging jets. Even so, because the 767 is so expensive (around $25 million, not counting spares and support equipment), United also bought 30 advanced versions of the popular 727, for $400 million.

At $1.6 billion, United's orders are by far the largest transaction in aviation history. But they are only the beginning, and they affect far more than just the airlines. Aircraft sales abroad are one of the U.S.'s largest export items, and without them the nation's trade balance would suffer disastrously. Plane sales are also a matter of national pride, and for the first time ever, the U.S.'s dominance of civil aviation is being seriously challenged by European governments, which are pressing their state-owned airlines to buy jets made by their own industries. Until the United purchase of the 767, the U.S. had no viable competitor to the European Airbus, at present the only wide-bodied, twin-engine jetliner with short-to-medium range.

Now the race is on. Within days, or at most weeks, other airlines will have to start placing orders to secure favorable delivery positions. Ultimately, the non-Communist world's 100 lines are expected to buy some 2,000 medium-range and 3,000 long-range jets. The bill: at least $70 billion.

At a press conference, United Airlines Chairman Edward E. Carlson and President Richard J. Ferris explained the decision. Ferris conceded that his airline's experts had been attracted by the advanced version of the European Airbus; designated the B10, it is a scaled-down, 200-passenger version of the present Airbus, four of which are already flying for Eastern Air Lines. The 767 won, said Ferris, because of its superior performance for passengers and pilots alike. Passengers, accustomed to the sardine seating in the present jumbos, will find the 767 less claustrophobic. The coach section will have seven seats abreast, aligned in a two-three-two pattern, with two aisles. The 767's flying characteristics will incorporate a new wing, which provides for more lift with less surface than other designs, and highly sophisticated guidance and automatic landing systems for all-weather operations.

The plane will also be highly economical. Its engine will sip far less fuel than current models. Result: the 767, which will replace DC-9s as well as 707s and older 727s, will carry as many or more passengers for one-third less fuel.

Buoyed by the United order, Boeing will almost certainly retain its command in the global jet market. On Boeing's drawing boards are two other members of the new generation:

> The 757, a narrow-bodied, twin-engine jetliner carrying 150 passengers on short (up to 1,900 miles) hops.

> The 777, a modification of the 767 with three engines. It is intended primarily for overwater use, where most airlines want the reassurance of an extra engine.

Shortly before United's announcement, Airbus Industrie, the state consortium owned jointly by France, West Germany and Spain, took an early lead in the sale of new-generation jets by winning 20 orders, worth $500 million, from Lufthansa, Swissair and Air France for the B10. Airbus executives pretended not to be discouraged by Boeing's victory. "United's order was not a launch order for us as it was for Boeing," said one Airbus official in Paris.

Boeing is looking for partners to share the work. In the late '60s and early '70s, the company had to reduce its payroll drastically due to the cutbacks of its aerospace programs. Though the company has added some 8,000 workers to help build the new superjets, it wants to avoid another boom-bust cycle. Boeing's first choice for a partner would be British Aircraft Corp., which would give the new planes a European flavor and make them easier to market within the European Community. So far, the British have not decided whether to join Boeing or Airbus. The United decision may give them a nudge.

What sparked the revolution in air travel is the new low fares. President Carter is determined to promote vigorous competition among the airlines, and the Civil Aeronautics Board is approving just about every low-fare proposal. The consequence: passenger travel has risen an unexpected 17% this year. Caught by surprise, the airlines often do not have enough seats to meet demand.

But what lines can afford to buy the new planes? As Carter encourages greater competition, the weak airlines will be taken over by the strong, and the small will unite to become bigger. Continental and Western, two healthy medium-size trunk carriers, are contemplating a merger. North Central and Southern are planning a corporate marriage that would convert them into a major airline along the nation's north-south spine. Texas International, a small regional, has bought 9.2% of the shares of big National Airlines and may try to take it over.

As a populist, Carter opposes concentrations of economic power, and CAB Chairman Alfred Kahn has labeled the merger trend "worrisome." But survival of the fittest is the logical consequence of the President's deregulation policy. Because the new-generation jets are so expensive, the fittest are certain to be only the richest and biggest.

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