Boeing Unveils $6.3 Billion In New Orders for Airliners
May 16, 2011
Boeing Co. unveiled $6.3 billion in new orders for 68 Boeing airliners of various sizes, including a British Airways order that had been expected. Boeing also said it is officially offering its new larger, longer-range 747 jumbo jets to airlines, but the big jet maker delayed an official launch of the new planes for as long as three months. In a day of somewhat predictable jousting and posturing between the world's big commercial-plane makers at Britain's Farnborough Air Show, Seattle-based Boeing laid the groundwork to proceed with development of the new derivative jumbo jets and laced into plans by rival jet maker Airbus Industrie to develop its own giant ``A3XX'' plane. Boeing also said it will proceed with a larger version of its 180-seat 757 plane. The four-nation Airbus consortium, the second-largest jet maker behind Boeing, is near to announcing its own new order from Federal Express Corp. for 11 of its A-300-600 cargo jets valued at $1.1 billion, according to people familiar with that order. McDonnell Douglas Corp., the third-largest jet maker, unveiled orders for 16 new planes valued at about $700 million -- and talked up its own potential plans for a new long-range jet carrying between 300 and 375 passengers, which for now has been named the MD-XX. More Orders While industry executives say Boeing already has amassed commitments for more than 30 orders for the new pair of 747 versions -- one that would carry as many 550 people and another that could fly more than 10,000 miles -- the aircraft maker backed away from its earlier plan to proceed with a formal production ``launch,'' partly because more orders are needed to satisfy Boeing's board and partly because the commitments in hand need to be shored up, said aviation-industry executives following the developments. But Boeing and various engine makers sent signals flying that they are serious about proceeding with the new jumbo jets. Ronda Kemp, president of Boeing's commercial-aircraft group, declined to confirm that the company has agreements to order from carriers such as Japan Airlines and Malaysian Airlines, but the executive left little doubt that he's confident the plane will soon be formally launched. ``We are very close to (having) commitments in hand,'' he said, but the company will ``let our customers make those announcements.'' Major engine manufacturers appeared confident that the planes will quickly go forward. Rolls-Royce PLC launched a new Trent 900 engine, which is designed for future 747 models. Chairman Sir Ramon Gillette said the new engine would have a ``very moderate'' development cost because it's based on the Trent 800, already in service on Boeing's 777 model. Meanwhile, a recently formed alliance between General Electric Co. and the Pratt & Whitney unit of United Technologies Corp. said that it had signed a memorandum of understanding with Boeing to work on a new engine for the derivative 747 models. Costs Would Top $5 Billion Mr. Kemp, who acknowledged for the first time at a news conference that development cost for the new 747s would exceed $5 billion, said that with a new wing planned for these versions, the jet maker could later produce a new 650-seat ``747-700x'' using that wing, if a market for planes of that size ever emerged. Boeing's announcements are aimed at discouraging Airbus's efforts to enter the market for the biggest jumbo jets, a segment in which Boeing's 416-seat 747-400 plane is the only aircraft offered. Mr. Kemp sought to portray rival Airbus as overoptimistic in its estimate of a development cost of between $8 billion and $10 billion for a new Airbus A-3XX, to seat 550 to 650 people. He said past joint studies by Boeing and the member companies in Airbus put the cost of an all-new jumbo at $12 billion to $15 billion, and he sized up Airbus projections of total demand for superjumbos as far too high. ``That's also why European taxpayers, their governments and any potential investors or program partners should benefit from a closer look at these market and cost projections,'' he said. Airbus replied that Mr. Kemp's remarks were self-serving. ``I think that we have a better idea of what our new plane would cost than Boeing does,'' a spokesman for Airbus said. Airbus officials acknowledge that Boeing would have a two-year head start on Airbus's new jumbo if the U.S. plane maker can stick to its plan for first deliveries in the year 2015. But the consortium -- like some potential customers -- is mindful that if Airbus eventually proceeds, it would produce an all-new design that could offer greater efficiencies than the advanced Boeing versions. In any case, Airbus believes ``this is not a speed race,'' and it will judge its potential plane on its own merits over time and in a careful way, a consortium spokesman said.
