Nantucket air disaster: Crash puts spotlight on Boeing as it battles with Airbus for orders

THE EGYPTAIR crash could not have come at a worse time for Boeing, producer of the 767-300ER plane that went down off Nantucket. The company, once the undisputed market leader in commercial aircraft, needs all the help it can find to avoid losing more orders, particularly to the European consortium Airbus. A crash can only focus embarrassing attention on its commercial and manufacturing woes.

The day before the crash, the company came in for sharp criticism from US safety regulators for its conduct after the crash of TWA Flight 800 three years ago off Long Island.

The engine was a Boeing 747 and investigations excluded initial theories that the plane was the victim of a terrorist bomb or shot out of the sky by a stray missile from a nearby US testing area. Experts now believe that the crash was caused by a catastrophic explosion of the central fuel tanks, which had taken in heat from air-conditioning units beneath them, although investigators have not established exactly how the vapours ignited.

What the US federal investigators did not know was that an internal Boeing inquiry had broached just such a possibility in 1980, 16 years before TWA Flight 800 crashed. They found this out only in June this year, as was confirmed this weekend.

Commercially, latest statistics suggest that Airbus is outselling Boeing by a 2-1 margin this year, the first time the Europeans have managed to beat the Seattle-based giant so significantly and only the fourth time that Boeing has been forced to take second place in the commercial sales table.

In the first nine months of 1999, Airbus signed orders for 343 aircraft, including 64 widebodied planes. Boeing had 154 signed orders, 35 of them widebodies. The most disappointing aspect for Boeing was the performance of its new long-range 777, which lost out to the Airbus 330-200 in a major order placed by El Al, the Israeli airline, last week. Another design, the Boeing 717, has also largely been overlooked in favour of the Airbus A318.

A year ago the company decided to emphasise profits rather than market share. The company is reluctant to secure contracts by offering big discounts and prefers to concentrate on accounts that bring in the money.

That strategy, when combined with a concerted programme of job cuts and cost-slashing, has improved the balance sheet - net income for the first six months of this year was $1.17bn compared with $308m a year earlier - but the moves have failed to stem the loss of orders.

Analysts say Boeing is still suffering from production lags from 1997. Although the backlog has now been cleared, the perception of inefficiency remains. Another problem is labour relations. Faced with a possible machine operators' strike in September, the company simply caved in on the main negotiating points, offering big pay rises and a promise to restrict outsourcing to other companies.