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Spate of Orders Boosts Boeing

New 787 Improving Company's Fortunes

By Sara Kehaulani Goo
Washington Post Staff Writer
Wednesday, April 27, 2005; Page E01

As Airbus SAS readies its new super-jumbo jet for its first test flight in France today, rival Boeing Co. is showing signs of a comeback in aircraft sales after a year of setbacks and public stumbles.

The Chicago company yesterday said Air India intends to purchase 20 of its new 787 Dreamliner airplanes. The announcement follows a major Boeing win on Monday when Air Canada -- a major Airbus customer -- announced an order for 14 787s and options for 46 more to replace the carrier's aging fleet. Boeing also won 10 orders for the 787 from Korean Air Lines and is said to be in talks with Northwest Airlines. The 787, a new long-haul plane promising impressive fuel efficiency, will seat up to 289 passengers and is scheduled to begin service in 2008.

Air Canada and Air India are the latest airlines to order the 787, shown in a computer-generated image. (Boeing Co. Via AP)

"This is better than we ever could have imagined," said Michael B. Bair, Boeing's program manager of the 787. Bair said one of his biggest problems now is to work out a delivery schedule for all the new plane orders. Boeing's manufacturing line is booked for 787 deliveries through 2010, he said. "It's hard to put a word on it. Phenomenal, gratified, excited. We're really, really pleased with how this is unfolding."

Airbus North America Holdings Inc.'s chairman, T. Allan McArtor, said Boeing's sales announcements were "disappointing," but he said Boeing offered sweet deals to the carriers to get the sales. "You will find some generous terms [in those deals] -- on pricing and extra sugar on top."

The competition between the two aircraft makers has turned intense in recent years as Boeing's once-predominant position has come under a strong assault from its European rival. Airbus, which receives aid from four European countries, surpassed Boeing in 2003 to become the world's biggest maker of commercial airplanes. With national pride also at stake, the rivalry erupted into a trade dispute last year between the United States and Europe. Airbus argues that Boeing gets tax breaks and military contracts that amount to subsidies. The sides are trying to settle the dispute.

Airbus plans as early as today to roll out its A380 at its headquarters near Toulouse, France, for the first test flight of a double-decker jet designed to carry as many as 1,000 passengers. Hundreds of spectators and journalists have camped out for days near the airport runway to get a glimpse of the mammoth plane. The flight test will not have passengers on board -- only a handful of test pilots and engineers -- and is expected to last for a few hours.

Boeing's Bair said the recent sales of the 787 have little to do with the apparent slowdown in sales of Airbus's mega-plane, since the planes are designed to serve different markets and different customers. But, he said, the swift 787 sales indicate that Airbus is having difficulty selling its newly announced competitor to the 787, called the A350.

"Airbus keeps trying to figure out what to do to compete against this airplane," Bair said. "Clearly they haven't found it yet."

Boeing now has 217 orders for the 787. The company said the new plane is also spurring sales of other models -- namely, the 777. The Air Canada and Air India deals add up to $11.9 billion based on list price, although the planes are often sold at a discount.

Just a year ago, Boeing could not seem to get out from under a cloud. It announced the launch of the 787 with much fanfare, but the company fell short of its publicly stated goal of obtaining 200 firm orders by the end of 2004. Adding to the company's troubles, a deal to sell 100 air tankers to the U.S. Air Force collapsed last fall after Boeing admitted it illegally hired an Air Force procurement official. Airbus, meanwhile, announced plans to build the A350 -- an airplane to compete with the 787; and earlier this year, Boeing's chief executive stepped down after admitting to an affair with another employee.

Robert A. Milton, chief executive and chairman of ACE Aviation Holdings Inc., parent company of Air Canada, said he considered the Airbus A350 but ultimately was won over by the Boeing 787's promise of fuel efficiency and new technology, including the lightweight composite materials -- instead of aluminum -- that will be used throughout the plane. The Boeing planes would give the carrier a competitive edge in its routes to Asia and especially to China, Milton said in a teleconference Monday with reporters and analysts.

The 787 is "a true game-changer -- a quantum leap in technology -- the likes of which our industry has not seen in decades," Milton said.

© 2005 The Washington Post Company