The next time you board a Boeing (NYSE:BA) 757 to fly somewhere, consider asking the crew or a friendly fellow passenger to take a photo of you on the plane as you wipe a tear with your hankie. The plane won't be gone tomorrow, but it has just taken the first step toward extinction.
The jet maker has announced that due to sluggish demand, it will cease production of 757s by the end of 2004. It hasn't received enough orders to merit continuing production. If it's not sad enough that a 22-year era of 757 production is grinding to a halt, there's more. Closing up shop will cost Boeing money, and right now that's estimated to amount to a $184 million pre-tax charge. Layoffs may also be in the offing.
Those angry and wishing to lash out might do so against Continental Airlines (NYSE:CAL). Continental, the fifth-largest U.S. air carrier, had placed 11 of the 18 orders for 757s. It recently told Boeing that it was canceling six of the orders, and will instead order 737-800s.
Allan Mulally, Boeing Commercial Airplanes' chief executive, is quoted in a Financial Timesarticle as saying, 'This decision reflects the market reality for the 757 as well as the growth in range and seating capacity of our market-leading Next-Generation 737 family. Over the long term, the increased capabilities of our newest 737s and the exciting potential of the [new mid-size] 7E7 will fulfill the market served by the 757."
The Financial Times notes that since 1981 Boeing has sold some 1,000-plus 757s to 55 different airlines. That sounds good until you realize that more than 4,600 737s have been made and sold.
In other Boeing news, Congress believes Boeing may have overcharged the Air Force for some airplanes -- to the tune of $10 million each.
To learn more about Boeing and its current prospects, check out this recent Fool article , which details some promising developments.Also, drop in on ourBoeing discussion boardto see what Fools are saying (free 30-day trial available). The Boeing board has been home to many a Post of the Day.
