ALAN MULALLY, President and CEO, Boeing Commercial Airplanes

Boeing Commercial Airplanes President and CEO Alan Mulally recently spoke with Boeing Frontiers about how Commercial Airplanes is responding to the continued, severe industry downturn and about this year's Paris Air Show.

Q: What's the outlook for the struggling commercial aviation industry?

A: In the short term, all of us continue to face the challenges of managing through a really difficult and unprecedented industry downturn. A weak global economy, terrorism, the war in Iraq, and the SARS [severe acute respiratory syndrome] virus have significantly reduced air travel and affected everyone in the industry.

We believe that long-term growth in our business is based on economic activity, and that commercial aviation is crucial to the economic growth of the world. Ultimately, global economic activity, passenger travel and freight transportation levels will recover. Once they do, we are forecasting that 70 percent of our new airplanes will be used for travel growth, while 30 percent will be used to replace older airplanes.

So as tough as this is now, it is important to recognize that we have a fundamentally sound business in a long-term growth market. That's why we're continuing to invest in advances to our existing products and in new products like the 7E7.

Q: What's the most important thing Boeing is doing to manage through the current downturn?

A: Improving the quality, productivity, safety and efficiency of the global air transportation system is the best thing we can do to help our customers and ourselves. We are intensely focused on supporting our customers and protecting our ability to invest in the future by running a healthy business that matches our production capacity to market demand for our products and services. We continue to consolidate and restructure to put ourselves in a strong position when our industry recovers.

Q: If you could pick one thing that will define the future of commercial air travel, what would it be?

A: Point-to-point travel. That is the belief that people prefer direct, non-stop flights that take them efficiently, safely and affordably where and when they want to travel. This is central to our long-term product strategy. We believe it is already defining our industry and will continue to do so. It will demand faster, longer-range, smaller and fundamentally more economical airplanes. This is why we are developing the new 7E7. We believe it addresses a huge need in the marketplace and it represents our commitment to maintaining our long-term competitive edge in commercial aviation.

Q: What was the significance of All Nippon Airways' recent 737 order?

A: It was a tremendously hard-fought competition. Our team worked very hard to demonstrate the 737's capabilities and better value to an important customer in an important region of the world. ANA chose the 737 primarily because of the airplane's compatibility to ANA's domestic route network, and its ability to perform efficiently and economically. The 737 will help ANA meets its goals of improving customer satisfaction and operating efficiencies. We believe so much in ANA's business model with their focus on their customers and productivity. And we're so pleased and proud that ANA has chosen Boeing as their business partner. It was a tremendous vote of confidence in us and the 737 from a very valued customer.

Q: What will be different for Boeing at the Paris Air Show versus last year's big Farnborough air show?

A: Boeing Commercial Airplanes will be well-represented and sharing our story. The new 777-300ER will be on display, as will one of our Boeing Business Jets. And we're going into this show with a tremendous amount of industry excitement about the new 7E7. People will be impressed with how much progress we are making on this next great improvement in flying.

Q: Will you be announcing orders at the air show?

A: A couple of years ago we consciously stopped saving up orders to announce during the major air shows. Everyone is much happier with this approach. In partnership with our customers, orders are now typically announced as they occur throughout the year and are posted on our Web site. However, if there are naturally occurring orders ready for announcement by our customers during an air show, we will join them in making the announcement.