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MCDONNELL DOUGLAS AND AIR CANADA TO STUDY DC-9 MODERNIZATION PROGRAM

 PARIS, June 15 /PRNewswire/ -- Air Canada and McDonnell Douglas have signed a letter of intent for the two companies to undertake a study to modernize and upgrade Air Canada's fleet of DC-9 jetliners. The study will develop technical and business details enabling the companies to decide on proceeding with the program this fall.
 Air Canada operates 35 of the intermediate range twin-engine aircraft. The airline expects it could add 15 years of operational life to the airplanes following incorporation of modernization features, while achieving maintenance costs and dispatch reliability levels similar to those of the first years of a new airplane's life.
 McDonnell Douglas said it would warrant the aircraft and provide a new service life policy for the aircraft.
 The DC-9 modernization program will help Air Canada meet its need for a 100-seat airplane but at an investment substantially below the cost of purchasing new aircraft.
 The program would use Air Canada's resources and those of other Canadian companies. Air Canada estimates that the program could add more than 700 jobs to the Canadian economy over a three-year period. Additional jobs are possible in support industries in Canada which could double the total Canadian job opportunities.
 The program could potentially include re-engining, re-wiring, new avionics and other system upgrades. The companies would evaluate and select a propulsion system configuration that would be capable of satisfying noise and emission requirements currently in effect and expected during the next decade.
 Air Canada said the long structural life of DC-9s gives the airline the advantage of providing modern upgrades on the airframe and getting many more years of service.
 McDonnell Douglas and Air Canada said they would be open to using the modernization program with other DC-9 operators who want to extend the life of aircraft in their fleets. The company estimates that there are more than 400 DC-9s operating in North America which could be modified to meet the stringent limits on engine noise and emissions that have evolved since the DC-9s were delivered.
 "There seem to be many important advantages to our proposed option," said Hollis L. Harris, chairman, president and chief executive officer of Air Canada. "The modernization of our 35 DC-9 aircraft would allow us to significantly extend the life of one third of our fleet at a very competitive price and under warranty of the manufacturer."
 "Airlines today are faced with many challenges," said John Wolf, executive vice president of Douglas Aircraft. "Their balance sheets and credit ratings have deteriorated, there are fewer sources of capital and it's more expensive, and they are rationalizing their fleets for capacity as well as for noise and emissions. We believe that modernizing their DC-9s is an ideal option in today's business environment, and we think it will make sense to airlines to extend their fleets at a low cost."
 McDonnell Douglas and Air Canada are talking with Pratt & Whitney and Rolls-Royce about an engine solution for the DC-9 modernization program.
 "Pratt & Whitney is offering three distinct approaches for this program," said Nicolas Tomassetti, executive vice president of Pratt & Whitney Commercial Engine Business. "We have proposed noise kits for the conventional JT8D engines currently on the DC-9. We also have an advanced, low-cost JT8D-218A available, as well as the new SNECMA/MTU/Pratt & Whitney/General Electric engine announced at the Paris Air Show."
 John Cheffins, director, civil engines, Rolls-Royce, said the company "is in active dialogue with McDonnell Douglas and Air Canada on the suitability of the Tay 670 for the DC-9. The engine meets the requirements for the aircraft's modernization program. Aircraft re- engined with the Tay are already demonstrating significant advantages on noise levels, emission, fuel burn and reliability."
 -0- 6/15/93
 /CONTACT: John Thom of Douglas Aircraft Co., 310-593-9223; or Ronald White of Air Canada, 514-422-5921/


CO: McDonnell Douglas Corp.; Air Canada ST: IN: AIR SU:

JB-MF -- LA024 -- 2193 06/15/93 13:53 EDT
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Date:Jun 15, 1993
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