Boeing executives are predicting a blowout quarter for 787 sales that will seal the success of the Everett-assembled jet and leave a proposed...
Boeing executives are predicting a blowout quarter for 787 sales that will seal the success of the Everett-assembled jet and leave a proposed rival from Airbus in its dust.
A big order was unveiled by Air India today, on the heels of one announced yesterday by Air Canada.
According to an internal Boeing document obtained by The Seattle Times, executives project in the next two months 177 firm orders for the 787, worth $23 billion at list prices.
Most Read Stories
- Elizabeth Warren: ‘The next step is single-payer’ health care
- Seattle No. 1 in home-price growth again; starter homes require half of income
- Costco is testing a new burger in Seattle, and it might remind you of Shake Shack
- Zillow vs. McMansion Hell: Seattle company not backing off fight with blog despite PR fiasco
- UW study finds Seattle’s minimum wage is costing jobs
The pace is a sharp reversal from late last year, when Boeing was embarrassed by failing to hit its announced target of 200 orders for the new, advanced-technology jetliner.
Boeing’s 787 sales efforts stalled badly last year after Airbus announced plans for the rival A350, and airlines paused to consider it. Now, though, the market is swinging in Boeing’s direction.
The company secured in quick succession important order wins for the 787 from Korean Air Lines and then Northwest Airlines — both Airbus A330 customers that might have been expected to go with Airbus’ A350, planned as an A330.
Yesterday, Air Canada announced for Boeing, too. It will take 14 787s, with options to purchase 46 more later. The order also included 18 777s, plus options on 18 more of those larger wide-bodies.
The total firm order is worth about $6 billion at list prices, although discounts of at least 30 percent are standard.
For Airbus, “it’s a brutal series of defeats,” said industry analyst Richard Aboulafia of the Teal Group. “The market might be trying to tell Airbus something.”
Henri Courpron, president and chief executive of Airbus North America — who negotiated on the failed Air Canada and Northwest campaigns (the latter not yet officially announced) — said the A350 is far from finished, though to date it has won nothing more than a commitment from Spanish carrier Air Europa to order 10 of the jets.
But he admitted Boeing is currently in the ascendant in sales.
“We can’t win them all,” said Courpron. “If this year Boeing wins more market share than us, all power to them. Maybe it’s their turn this year.”
This morning Air India announced a $6 billion order that includes 20 787s and options to buy seven more later
A Boeing document prepared a month ago for 787 program chief Mike Bair illustrates the remarkable acceleration in orders for the new, all-composite plane.
Boeing won only four firm orders for the new jet, formerly called the 7E7, in the last quarter of 2004. It won eight more in the first quarter of this year to reach a total of 64 firm orders.
But by the time the current quarter ends June 30, according to the document, Boeing expects to have 241 firm orders.
Boeing can reach that total only if it signs firm contracts for all of the previously announced orders and also adds 24 more from sales campaigns where it has not yet publicly declared victory.
While firming up every single announced contract in two months won’t be easy, Boeing 787 spokeswoman Yvonne Leach wasn’t daunted by the thought of adding soon a couple dozen more new orders.
“That’s doable,” she said.
When the 787 formally launched, “Airbus was saying that the 787 was not a real airplane,” said Leach. “A year later, customers are voting.”
Currently the 787, due to enter service in 2008, has a two-year head start on the A350.
But analyst Aboulafia said market rejection of the A350 could force Airbus to scrap the plan to design it as a derivative of the A330, and incur the extra cost and delay of developing an all-new jet to compete with the 787.
“This could mean the end of the A350,” Aboulafia said. “That means Boeing would have a five-year clean shot at the market.”
Airbus’ Courpron left open all options, including looking at a new plane.
“We adjust our plans all the time,” he said.
However, he stuck to the company’s previous projection that it would have 50 Airbus A350 orders by the Paris Air Show in June, and 100 by year-end.
He attributed the Air Canada loss to aggressive pricing by Boeing and what he characterized as a conservative decision by the airline to go with the smaller jet. The 787 had about 30 fewer seats in the airline’s configuration than had the A350.
Courpron described that as a misjudgment based on today’s traffic levels and pinched airline environment.
Boeing’s Leach saw it instead as a confirmation of Boeing’s philosophy of designing smaller, long-range airliners for a future global air network that will favor point–to-point routes.
Air Canada routes
Backing that up, Air Canada said in a statement that it chose the 787 and the 777 for its planned daily non-stop services that will fly Toronto to Beijing and Toronto to Shanghai in 2006, and Vancouver, B.C. to Guangzhou, China, service in 2007.
Boeing executives expect 787 sales momentum to slow after this quarter’s surge.
The largest pending 787 sales campaign isn’t expected to be sealed this year.
Qatar Airways is discussing an order for about 60 jets but is interested in the stretch version of the jet — due to enter service two years after the first models.
Nonetheless, at the end of 2005, Boeing’s new jet program is projected to have 241 firm airplane orders, leaving the Airbus A350 sitting on the runway.
Dominic Gates: 206-464-2963 or firstname.lastname@example.org