Boeing won a deal to supply more than 60 planes worth $8.8 billion to leasing firm ILFC on Tuesday, in a fresh sign of buoyant demand for its hot-selling 787 Dreamliner aircraft.
The order is Boeing's first major deal announcement at a Paris Air Show so far dominated by rival Airbus and its bonanza of deals. Airbus said it would top 600 firm orders this year, after unveiling 219 worth more than $30 billion on Monday. for Air Show stories.
International Lease Finance Corp (ILFC), the world's largest plane leasing company by fleet value, said it had has ordered 50 787 Dreamliner wide-bodied aircraft and has an option for two more 787s, which the US planemaker said it was exercising.
ILFC, which is owned by American International Group Inc, also ordered 10 737 planes and one 777-300 ER plane. The two 787 options and the single 777-300 ER had previously been listed on Boeing's company Web site as options attributed to an unidentified customer.
With today's deal, ILFC is the largest customer of the 787 with 73 787-8 planes and one 787-9 plane on order. "We are experiencing strong leasing demand from airlines all over the world for the Boeing 787 Dreamliner," ILFC Chief Executive Steven Udvar-Hazy told reporters. ILFC has a portfolio valued at more than $48 billion, consisting of about 900 jet aircraft.
Airbus' 600 unit sales prediction for 2007 would be a sharp drop from 790 net orders in 2006 when it surrendered leadership of the global order race to Boeing and saw its market share fall to 43 percent, following delays in building its A380 superjumbo and designing the mid-sized A350.
It is the first 2007 order forecast issued by Airbus - it usually only predicts deliveries, which are forecast at 440-450 this year, leaving Airbus on top of Boeing - but reflects the firm's growing optimism as it recovers from a shaky start.
"Airbus is back, and fully back," Airbus President Louis Gallois told a news conference. Airbus started the year at a slow pace as it sought to catch up with Boeing's successful 787 Dreamliner, which dominated industry attention in 2006 and attracted those additional 52 firm orders from US lessor ILFC on Tuesday. But it began making inroads with more than 100 A350 XWB's, its rival model, sold on Monday.
Gallois quipped at a news conference he would send a copy of the A350 brochure to Boeing Chief Executive James McNerney. The two were partners when Gallois worked for French aero engine Snecma and McNerney for GE.
Airbus tried to turn the tables on Boeing by accusing its US rival of heavily discounting the 787 Dreamliner to reach its order tally of over 600 jets, mirroring accusations which Boeing more usually makes about Airbus.
Leahy said airlines had told him the 787 was offering keener pricing on at least two recent deals. He acknowledged, however, that Airbus itself offers discounts against list price as part of what he called a launch price package for the A350. "We are not ready to sacrifice price to get orders," Gallois said, adding: "It's an extremely competitive duopoly."
Boeing 787 programme head, Mike Bair, later told reporters he was "happy with where we are at on pricing". "It's a bit of a misnomer that competition between us and Airbus is the driver of price in the industry," Bair told a news conference. "What you are willing to pay for a ticket is what drives the price of the airplane. That has become more of an issue in determining pricing across all airplane models than competition against Airbus," he added.
Airbus has been hit by delays to its A380 superjumbo, which caused a slump in the 2006 profits of its parent company EADS. It has embarked on a restructuring plan called Power8 and Gallois said it had already achieved half of the 300 million euros of savings budgeted for 2007, year one of the plan.
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