CANBERRA, March 11, 2008 – Boeing [NYSE: BA] formally launched today an Australian branch of its Phantom Works advanced research and development unit to better support its businesses in Australia and partner with researchers there on the development of mutually beneficial technologies.

"Establishing Phantom Works in Australia expands Boeing’s 80-year relationship with this country by introducing exciting new technology opportunities for both of us," said John Tracy, Boeing senior vice president of Engineering, Operations & Technology and chief technology officer. "It’s also another example of how Boeing is partnering with the best technologists in the world to develop innovative aerospace solutions to meet our customers’ needs."

The new Phantom Works branch will provide a centralised advanced R&D organisation for Boeing’s businesses in the country and serve as a focal point for continued collaboration with Australian R&D organisations, including universities and private sector R&D providers, the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Defence Science and Technology Organisation (DSTO).

The branch will employ approximately 30 senior engineers, scientists and researchers in Melbourne and Brisbane. Leadership of the organisation will be based in Brisbane. Staff will consist of transfers from existing Boeing businesses in Australia, as well as others hired from outside the company.

Ongoing and new technology work areas will include composite resin infusion, light robotics for manufacturing and precision coatings, aging aircraft maintenance, applications of advanced unmanned air vehicles, network centric operations and aerospace environmental applications. However, these areas will evolve to meet the emerging needs of Australia and Boeing businesses.

"With 4,000 Australian employees, Boeing is firmly committed to Australia," said Craig Saddler, president of Boeing Australia and South Pacific. "This takes the relationship between Boeing and Australia to a higher level because it will help grow the

capabilities of the Australian R&D industry to meet the emerging needs in Australia, as well as throughout the Asia-Pacific region."

Boeing has a substantial presence in Australia through its wholly owned subsidiaries, Boeing Australia Limited, Hawker de Havilland Limited, Jeppesen Australia, Alteon Training Australia, Boeing International Corporation, Jeppesen Marine and Aviall Australia. The company is the major supplier of commercial airplanes to Qantas Airways, Virgin Blue Airlines, Air New Zealand, Air Pacific and other Pacific Island carriers. Boeing also is the leading provider of support for the Royal Australian Air Force’s frontline strategic and tactical aircraft – the F-111 and F/A-18 via substantial facilities and investments at Amberley, QLD, and Williamtown, NSW.

In December 2007, Boeing’s Integrated Defense Systems business unit also opened the Office of Australian Industry Capability (OAIC) to help increase opportunities for Australian companies within Boeing. The OAIC and Phantom Works Australia will work together to identify areas in which local industry can benefit from Boeing’s latest investment in Australia.

As Boeing’s advanced R&D organisation, Phantom Works provides innovative technologies that enable the development of future aerospace solutions while improving the cycle time, cost, quality and performance of current aerospace systems. To ensure technologies are ready when needed, Phantom Works not only conducts its own development but also works with top research groups around the world to find the most innovative and affordable solutions possible.