hotnhigh
20th Jun 2005, 01:21
If you sign the eba we will sign.............
SAN FRANCISCO (MarketWatch) -- Boeing Co. has lost a $6 billion Air Canada order for 777 and 787 jets after the members of the carrier's pilots union rejected a cost-cutting deal that would have cleared the way for the purchase.
The Air Canada order, announced April 25, included firm orders for 18 Boeing 777s and firm orders for 14 of the aircraft manufacturer's next new jet, the 787 Dreamliner. The firm orders were worth about $6 billion at list prices. The price on a 777 can run from $165 million to almost $246 million, depending on the version. A 787 has a list price of about $120 million.
"To cancel 18 777s is almost unheard of, especially when it was not a question of management's change of mind," said Doug McVitie of the consulting firm Arran Aerospace. "Their mind was changed for them by the pilots."
All told, the deal could have included another 18 Boeing 777s and as many as 46 more 787s.
The first 777s were to be delivered in the early part of next year. The 787s would've begun to arrive in 2010 to replace Air Canada's 767s.
"We cannot lose sight of the effort it took to get to where the airline is today, and while the cancellation of this aircraft order will be disappointing to our employee group at large, including many of our pilots, it is the right decision given the circumstances," said Air Canada Chief Executive Officer Montie Brewer in a statement. The Montreal-based company would not comment further. There is no penalty associated with the cancellation, the company said.
At the time of the order's announcement, analysts noted Air Canada's decision to eschew Airbus planes for those of Chicago-headquartered Boeing. Air Canada, which has a fleet of 293 aircraft including its Jazz line, emerged from bankruptcy protection last fall.
On June 9, the leadership of the Air Canada Pilots Association had endorsed an agreement for the new planes.
Boeing said it was disappointed by the cancellation but emphasized that interest in the two wide-body aircraft models is strong.
"We are seeing very strong demand for the 777 and the 787. Therefore, we believe we will have numerous opportunities to place these aircraft elsewhere," said a Boeing spokesman Boeing announced new 777 orders last week at the Paris Air Show. No new deals for 787s emerged, but executives have said demand for the model has been very high, leaving its production effectively sold out through 2010.
The loss of the Air Canada deal, though, is significant. "This is really Boeing's first reverse on the 787," said Arran Aerospace's McVitie.
SAN FRANCISCO (MarketWatch) -- Boeing Co. has lost a $6 billion Air Canada order for 777 and 787 jets after the members of the carrier's pilots union rejected a cost-cutting deal that would have cleared the way for the purchase.
The Air Canada order, announced April 25, included firm orders for 18 Boeing 777s and firm orders for 14 of the aircraft manufacturer's next new jet, the 787 Dreamliner. The firm orders were worth about $6 billion at list prices. The price on a 777 can run from $165 million to almost $246 million, depending on the version. A 787 has a list price of about $120 million.
"To cancel 18 777s is almost unheard of, especially when it was not a question of management's change of mind," said Doug McVitie of the consulting firm Arran Aerospace. "Their mind was changed for them by the pilots."
All told, the deal could have included another 18 Boeing 777s and as many as 46 more 787s.
The first 777s were to be delivered in the early part of next year. The 787s would've begun to arrive in 2010 to replace Air Canada's 767s.
"We cannot lose sight of the effort it took to get to where the airline is today, and while the cancellation of this aircraft order will be disappointing to our employee group at large, including many of our pilots, it is the right decision given the circumstances," said Air Canada Chief Executive Officer Montie Brewer in a statement. The Montreal-based company would not comment further. There is no penalty associated with the cancellation, the company said.
At the time of the order's announcement, analysts noted Air Canada's decision to eschew Airbus planes for those of Chicago-headquartered Boeing. Air Canada, which has a fleet of 293 aircraft including its Jazz line, emerged from bankruptcy protection last fall.
On June 9, the leadership of the Air Canada Pilots Association had endorsed an agreement for the new planes.
Boeing said it was disappointed by the cancellation but emphasized that interest in the two wide-body aircraft models is strong.
"We are seeing very strong demand for the 777 and the 787. Therefore, we believe we will have numerous opportunities to place these aircraft elsewhere," said a Boeing spokesman Boeing announced new 777 orders last week at the Paris Air Show. No new deals for 787s emerged, but executives have said demand for the model has been very high, leaving its production effectively sold out through 2010.
The loss of the Air Canada deal, though, is significant. "This is really Boeing's first reverse on the 787," said Arran Aerospace's McVitie.