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McDONNELL DOUGLAS REPORTS ON TRANSPORT AIRCRAFT OPERATIONS

 McDONNELL DOUGLAS REPORTS ON TRANSPORT AIRCRAFT OPERATIONS
 SINGAPORE, Feb. 25 /PRNewswire/ -- Robert H. Hood, president of the Douglas Aircraft division of McDonnell Douglas, told a news conference at the Asian Aerospace exposition here today that the transport aircraft operations of the company were "in the process of a major turnaround."
 Hood said the financial rebound at Douglas reflects strong improvements "including increased production, reduced unit costs, higher prices, better management of assets, and lower development costs."
 The transport aircraft business of McDonnell Douglas had operating earnings of $200 million in 1991, compared with an operating loss of $177 million in 1990.
 "We drove down our production costs," Hood said, "in part due to tough management decisions, and we also made great progress in delivering our products on time and with expected quality. Customer satisfaction is definitely improving."
 Hood also said that McDonnell Douglas and Taiwan interests had "conducted very exhaustive -- and very productive -- examinations of the capabilities of both parties" of a proposed equity purchase of up to 40 percent of the McDonnell Douglas commercial aircraft operations by Taiwan investors. The proposed alliance was announced last November.
 "An evaluation team from Taiwan, representing a cross-section of business interests and the government," he said, "have been reviewing Douglas' operations. Both sides are obliged to make a complete evaluation of the requirements and commitments associated with the proposal."
 Hood also forecast "better times" ahead for the airline industry. "Airlines today are faced with some of the toughest challenges they have seen in years: high fuel costs, reduced travel and financial losses," he said.
 These conditions "led to a sharp decline in new orders in 1991 for everyone in the industry," Hood said. "We were especially hard hit. But we see recovery ahead in the economy and better times for airlines."
 McDonnell Douglas delivered 169 aircraft in 1991, had four others completed through assembly and delivered two others involving a repurchase agreement. "This represents the busiest delivery year for McDonnell Douglas since the late 1960s," Hood said.
 Hood also reviewed the company's current and planned aircraft programs, including the widebody MD-11 and MD-12, its MD-80, MD-90 and MD-95 narrowbody twin jets and the MD-XX. Those aircraft, Hood said, "represent one of the cornerstones in the McDonnell Douglas transport aircraft strategy. We are building a family of jetliners for all market segments. No more will we sell in just one or two market niches."
 Referring to McDonnell Douglas' negotiations with the People's Republic of China on that country's Trunkliner program, Hood said that the company hoped "to reach final agreement with the Chinese on this program in the very near future.
 "We will co-produce MD-90s in China, plus additional MD-80s, to help them meet their need for up to 170 aircraft to serve cities throughout that large nation," Hood explained.
 In conjunction with the Trunkliner program, Hood told the news conference that McDonnell Douglas also plans to introduce a new entrant in the 105-seat segment.
 The company is designing an MD-95 based on the successful design of the MD-80 and the durability and economic performance of the DC-9, Hood said. The aircraft is scheduled to be built in China and sold on the world market.
 "We see an excellent market for the MD-95," Hood said, "both as a candidate for intermediate range, low density routes and as a replacement for DC-9 Series 30 aircraft due for retirement soon."
 -0- 2/25/92
 /CONTACT: John Thom of Douglas Aircraft Co., 310-593-9223/ CO: McDonnell Douglas; Douglas Aircraft Co. ST: California IN: ARO AIR SU:


DM-JL -- LA029 -- 2475 02/25/92 15:31 EST
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Date:Feb 25, 1992
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