Boeing Considers Scrapping 717

 - October 4, 2007, 10:21 AM

After losing a four-way competition to Brazil’s Embraer for the sale of 45 narrowbody airplanes to Air Canada last year, Boeing has begun the process of evaluating the future of its enigmatic 717–the 110-seat “regional jet” now in danger of disappearing from industry view. In a filing with the Securities and Exchange Commission, Boeing said the survival of the Douglas DC-9 derivative hinges on “outcomes of current sales campaigns,” most prominently a tender by the remaining three Star Alliance airlines still in the market for new airplanes. The company estimates it would have to take a $400 million charge against earnings if it opts to end production, which yields just 12 airplanes a year at the former McDonnell Douglas plant in Long Beach, Calif.

The revelation will likely fuel conjecture about an eventual collaboration between Boeing and Bombardier on a proposed 110- to 125-seat airplane, built by the Canadian manufacturer with composite technology now under development for Boeing’s 7E7. With the 110-seat 717 still in production, Boeing obviously could not participate in a program that would compete directly with one of its own. In any case, Bombardier has tried to dispel the scuttlebutt, calling it baseless and “pure speculation.”