Boeing Signals Interest in Cargolifter

Boeing Corp., the world's largest aerospace group, is signalling interest in German airship developer Cargolifter, which has been plagued by financial difficulties and concern over its business plan.

The two companies announced on Thursday that they had signed a letter of intent to examine potential business opportunities to develop "lighter-than-air" vehicles for commercial, defense and security use.

Shares in Cargolifter, which are included in the M-Dax for Germany's 70 leading mid-caps, soared more than 16% to close at 3.84 euro.

But the actual objectives of the letter of intent remain unclear.

A Boeing spokesman said that his group's involvement with Cargolifter could progress "up to an investment". "But it can also come to nothing," he cautioned.

As Cargolifter's funds are running increasingly low, the question of whether the airships made in the east German state of Brandenburg will ever take off thus remains unanswered.

Chief Financial Officer Karl Bangert told Handelsblatt that the group's liquid funds would last for another three weeks at the most. He said cash funds in the second quarter, ended February, totaled around 17 million euro.

According to official figures, cash outflow reaches around 25 million euro per quarter.

Under existing plans, Cargolifter expects to turn a profit in its 2002/2003 business year, ending August 31.

Boeing considers airspace supervision to be a lucrative area for airships. In terms of cost and performance they were superior to aircraft in this field, a company spokesman said.