Wirraway
29th Jan 2005, 02:50
Friday, January 28, 2005
Boeing lands key order for 787s from Chinese
By JAMES WALLACE
SEATTLE POST-INTELLIGENCER AEROSPACE REPORTER
http://www.boeing.com/news/releases/2005/photorelease/q1/050128h.jpg
After months of negotiations, delays and political intrigue, The Boeing Co. will finally get its long-awaited order today from Chinese airlines for 60 787 jetliners.
That's right: 787s.
Boeing will announce not only its biggest 7E7 order to date, but that it will give the plane the next name in its 7-series of jets, which began with the 707, according to people familiar with the deal.
After a contract is signed, the deal would be worth about $7.2 billion at the jet's $120 million list price. The six Chinese airlines ordering the 7E7 are likely getting significant discounts.
The Seattle Post-Intelligencer first reported last month that in keeping with tradition, Boeing had decided to rename its new jet the 787 but was holding off on any announcement until it landed the China order.
The number 8 is considered lucky in China.
Boeing would not confirm how many 7E7s the six Chinese airlines will order, but sources have told the paper for months that the number would be about 60. A person with knowledge of the order confirmed that number again yesterday.
A ceremony to sign a preliminary agreement for the planes will be held at the Commerce Department in Washington, D.C.
Chinese officials, including the Chinese ambassador to the United States, will attend, along with Boeing Commercial Airplanes boss Alan Mulally.
More negotiations will be needed before a contract is signed, according to a person familiar with the accord that has been struck.
The Boeing-China event will take place only a few hours after an aircraft-signing ceremony across the Atlantic, where French and Airbus officials will meet today in Paris with a Chinese delegation to sign an agreement for five A380 superjumbo jets. The 555-seat planes are being ordered by China Southern, one of the six airlines that are ordering the 7E7.
It is the first order from China for the Airbus plane, which will replace Boeing's 747 as the world's biggest passenger jetliner.
The other Chinese airlines ordering the 7E7 are China Eastern, Air China, Shanghai Airlines, Hainan Airlines and Xiamen Airlines.
They will take a mix of the short-range 7E7-3s and longer range 7E7-8s, according to people familiar with the deal.
The models have the same size fuselage and can carry nearly 300 passengers in a two-class cabin configuration. The twin-engine 7E7 is bigger than Boeing's 767, which it replaces, but smaller than the 777.
China is a key battleground for Boeing and Airbus. Both airplane makers are providing more jetliner manufacturing work for Chinese companies as they seek to tap into the world's fastest-growing aviation market.
China's Chengdu Aircraft will supply the 7E7 rudder, a key part of the plane's vertical fin.
Boeing has awarded several other Chinese companies smaller amounts of work for the 7E7.
Last year, Boeing selected China's Xian Aircraft to supply floor beams for an important program to convert 747-400 passenger jets into freighters.
China’s Xian Aircraft Industry Co. builds vertical fins for Boeing’s 737 jetliners. Shanghai Aircraft Corp., also a Chinese company, builds horizontal stabilizers for the 737. (Editor's Note: The original version of this story misidentified the manufacturers of those parts.)
Some of these Chinese companies also make parts for Airbus jets. Airbus recently said it hoped to reach an agreement for Chinese companies to take a 5 percent equity stake in its A350 jetliner program.
The A350 will be the Airbus counter to the 7E7. It would be a derivative of the twin-engine A330, not an all-new jet like the 7E7.
Both the A380 and 7E7 could be used by Chinese airlines to carry passengers to the 2008 Olympic Games, which will be held in Beijing in August 2008.
The A380 will enter service with airlines next year. Boeing will start delivering the 7E7 to customers in the first half of 2008.
The China 7E7 order represents an industry milestone. For the first time, Chinese airlines will be the launch customers for a Western-built jet.
Industry observers say this is a significant opportunity for China to showcase its growing power, and place, in such an important industry as it gets ready to host the Olympics.
Boeing had been hoping to land the China order last year and had factored in those 60 planes as part of its internal expectations -- and public forecast -- that it would have about 200 7E7 orders by the end of 2004.
Instead, it ended the year with 126 firm orders and commitments.
Ordering new jets is a complicated process in China in which the government gets involved after its airlines have reached preliminary agreements with the airplane makers.
In the past, politics has resulted in delays in some Boeing airplane orders from China.
There had been speculation that politics again were to blame for the long delay in the Chinese 7E7 order.
But a person close to the situation said the delay was more the result of China wanting a better deal with Boeing.
China knew how important its order was for Boeing's 7E7 program, and it used that as leverage in the negotiations, according to this person.
But it is also probably no coincidence that the Chinese are signing deals with Boeing and Airbus on the same day.
Until now, Boeing's biggest 7E7 order was from the first customer, All Nippon Airways of Japan, for 50 planes.
Following today's signing ceremony at the Commerce Department, Mike Bair, vice president of the 7E7 program, will hold a teleconference with reporters, during which he is expected to explain why Boeing will change the plane's name to the 787.
Boeing's last new jet was the 777, which followed the 767, 757, 747, 737, 727 and 707.
It is not unusual early in a Boeing aircraft development program for the name of a proposed new jet to have a letter sandwiched between 7s.
With the 7E7, however, Boeing waited until well into the program to change the name.
Company executives wanted to carefully weigh the name change, given the successful worldwide marketing and branding associated with the 7E7 name.
But tradition -- and the prospect of making a good impression with China -- carried the day. In Mandarin, the main language of China, as well as in Cantonese, the pronunciation of "eight" sounds the same as "to make money."
In China, people pay money for license plates or phone numbers that end with the number 8. Weddings are planned around dates that include the number.
The Beijing Olympics will begin at 8 p.m. on 8/8/08.
Boeing is showing just how much it values China as a customer and partner by having the name change coincide with the announcement that Chinese airlines will order 60 jets.
China will get a double-dose of good luck with the Boeing jet. The 7E7-8 will now become the 787-8.
===========================================
Boeing lands key order for 787s from Chinese
By JAMES WALLACE
SEATTLE POST-INTELLIGENCER AEROSPACE REPORTER
http://www.boeing.com/news/releases/2005/photorelease/q1/050128h.jpg
After months of negotiations, delays and political intrigue, The Boeing Co. will finally get its long-awaited order today from Chinese airlines for 60 787 jetliners.
That's right: 787s.
Boeing will announce not only its biggest 7E7 order to date, but that it will give the plane the next name in its 7-series of jets, which began with the 707, according to people familiar with the deal.
After a contract is signed, the deal would be worth about $7.2 billion at the jet's $120 million list price. The six Chinese airlines ordering the 7E7 are likely getting significant discounts.
The Seattle Post-Intelligencer first reported last month that in keeping with tradition, Boeing had decided to rename its new jet the 787 but was holding off on any announcement until it landed the China order.
The number 8 is considered lucky in China.
Boeing would not confirm how many 7E7s the six Chinese airlines will order, but sources have told the paper for months that the number would be about 60. A person with knowledge of the order confirmed that number again yesterday.
A ceremony to sign a preliminary agreement for the planes will be held at the Commerce Department in Washington, D.C.
Chinese officials, including the Chinese ambassador to the United States, will attend, along with Boeing Commercial Airplanes boss Alan Mulally.
More negotiations will be needed before a contract is signed, according to a person familiar with the accord that has been struck.
The Boeing-China event will take place only a few hours after an aircraft-signing ceremony across the Atlantic, where French and Airbus officials will meet today in Paris with a Chinese delegation to sign an agreement for five A380 superjumbo jets. The 555-seat planes are being ordered by China Southern, one of the six airlines that are ordering the 7E7.
It is the first order from China for the Airbus plane, which will replace Boeing's 747 as the world's biggest passenger jetliner.
The other Chinese airlines ordering the 7E7 are China Eastern, Air China, Shanghai Airlines, Hainan Airlines and Xiamen Airlines.
They will take a mix of the short-range 7E7-3s and longer range 7E7-8s, according to people familiar with the deal.
The models have the same size fuselage and can carry nearly 300 passengers in a two-class cabin configuration. The twin-engine 7E7 is bigger than Boeing's 767, which it replaces, but smaller than the 777.
China is a key battleground for Boeing and Airbus. Both airplane makers are providing more jetliner manufacturing work for Chinese companies as they seek to tap into the world's fastest-growing aviation market.
China's Chengdu Aircraft will supply the 7E7 rudder, a key part of the plane's vertical fin.
Boeing has awarded several other Chinese companies smaller amounts of work for the 7E7.
Last year, Boeing selected China's Xian Aircraft to supply floor beams for an important program to convert 747-400 passenger jets into freighters.
China’s Xian Aircraft Industry Co. builds vertical fins for Boeing’s 737 jetliners. Shanghai Aircraft Corp., also a Chinese company, builds horizontal stabilizers for the 737. (Editor's Note: The original version of this story misidentified the manufacturers of those parts.)
Some of these Chinese companies also make parts for Airbus jets. Airbus recently said it hoped to reach an agreement for Chinese companies to take a 5 percent equity stake in its A350 jetliner program.
The A350 will be the Airbus counter to the 7E7. It would be a derivative of the twin-engine A330, not an all-new jet like the 7E7.
Both the A380 and 7E7 could be used by Chinese airlines to carry passengers to the 2008 Olympic Games, which will be held in Beijing in August 2008.
The A380 will enter service with airlines next year. Boeing will start delivering the 7E7 to customers in the first half of 2008.
The China 7E7 order represents an industry milestone. For the first time, Chinese airlines will be the launch customers for a Western-built jet.
Industry observers say this is a significant opportunity for China to showcase its growing power, and place, in such an important industry as it gets ready to host the Olympics.
Boeing had been hoping to land the China order last year and had factored in those 60 planes as part of its internal expectations -- and public forecast -- that it would have about 200 7E7 orders by the end of 2004.
Instead, it ended the year with 126 firm orders and commitments.
Ordering new jets is a complicated process in China in which the government gets involved after its airlines have reached preliminary agreements with the airplane makers.
In the past, politics has resulted in delays in some Boeing airplane orders from China.
There had been speculation that politics again were to blame for the long delay in the Chinese 7E7 order.
But a person close to the situation said the delay was more the result of China wanting a better deal with Boeing.
China knew how important its order was for Boeing's 7E7 program, and it used that as leverage in the negotiations, according to this person.
But it is also probably no coincidence that the Chinese are signing deals with Boeing and Airbus on the same day.
Until now, Boeing's biggest 7E7 order was from the first customer, All Nippon Airways of Japan, for 50 planes.
Following today's signing ceremony at the Commerce Department, Mike Bair, vice president of the 7E7 program, will hold a teleconference with reporters, during which he is expected to explain why Boeing will change the plane's name to the 787.
Boeing's last new jet was the 777, which followed the 767, 757, 747, 737, 727 and 707.
It is not unusual early in a Boeing aircraft development program for the name of a proposed new jet to have a letter sandwiched between 7s.
With the 7E7, however, Boeing waited until well into the program to change the name.
Company executives wanted to carefully weigh the name change, given the successful worldwide marketing and branding associated with the 7E7 name.
But tradition -- and the prospect of making a good impression with China -- carried the day. In Mandarin, the main language of China, as well as in Cantonese, the pronunciation of "eight" sounds the same as "to make money."
In China, people pay money for license plates or phone numbers that end with the number 8. Weddings are planned around dates that include the number.
The Beijing Olympics will begin at 8 p.m. on 8/8/08.
Boeing is showing just how much it values China as a customer and partner by having the name change coincide with the announcement that Chinese airlines will order 60 jets.
China will get a double-dose of good luck with the Boeing jet. The 7E7-8 will now become the 787-8.
===========================================