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Boeing airs 120 orders
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July 24, 2000: 11:15 a.m. ET
Seattle plane maker reveals sale of 737s, 777s to AIG, GE, All Nippon Air
By Staff Writer Abid Ali
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FARNBOROUGH, ENGLAND (CNNfn) - Boeing Co. unveiled Monday a batch of new orders for some 120 airplanes valued at a total sticker price of about $12.2 billion, upping the stakes in its tit-for-tat battle with Europe's Airbus Industrie for leadership in the world market for commercial jets.
At a news conference at the Farnborough International Airshow, the Seattle-based aerospace company said U.S.-based International Lease Finance Corp., an aircraft leasing division of insurer American International Group (AIG: Research, Estimates), placed a 40-plane order, made up of 33 wide-body 777s - twenty-five 777-200 ER models and eight 777s - in addition to seven smaller, shorter-range 737s.
 Meanwhile, GE Capital, a unit of General Electric (GE: Research, Estimates), has agreed to buy a total of 80 aircraft - sixty-five 737s and fifteen 777s - and took an option to buy another 59, Boeing said. The 80 firm orders include six 737s previously counted in Boeing's order book for what was at first an unidentified buyer - now known to be GE Capital.
Earlier in the day, Japan's All Nippon Airways announced a new purchase of six 777-300 long-range jets. ANA said in Tokyo it would pay about $1 billion for the aircraft, which would enter service in 2004.
Boeing didn't disclose what International Lease Finance or GE Capital would pay under the latest plane orders.
By list price, the 777-200 ERs are worth about $170.5 million each, the eight 777s for AIG are valued at some $192.5 million each. The 737s list for about $46 million per plane. However, airlines typically pay less than a manufacturer's list price, routinely extracting discounts of as much as 25 percent.
Tit-for-tat announcements
In early New York Stock Exchange trading Monday, shares of Boeing, one of the 30 stocks in the Dow Jones industrial average, rose 5/16 to 47-1/8.
The announcement of Boeing's orders came almost simultaneously with an Airbus news conference at which the French, German, Spanish and British aerospace consortium unveiled its keenly awaited first orders for the A3XX superjumbo jet. The orders, from Air France and Emirates, are worth up to $4.8 billion, Airbus said.
In an interview with CNN, Boeing Chairman Phil Condit said while Airbus may be banking on development of the A3XX, Boeing is responding. "We think there will be some very large airplanes needed in the market and we intend to respond with a variant of our 747.
"But we also think a lot of people want to fly direct, right where they want to go, and those direct flights will be served by airplanes like the 777, very long-range airplanes," Condit added.
In February, Boeing launched the 777X, a new variant of its twin-jet 777 long-range airliner. The plane comes in two classes: the 777-300X, which has 370 seats, almost as many as the 747-400 jumbo, while the 777-200X can carry about 300 passengers but has an extremely long range of some 16,000 kilometers.
Boeing has already announced orders for fifteen 777Xs: Japan Air Lines Co. bought eight 777-300Xs, and Taiwan's EVA Airways last month bought three 777-200Xs and four -300Xs.
Condit suggested the healthy order inflow was a sign that the airplane market has bright future.
"I think the airlines have not over-purchased airplanes, which has happened in previous cycles, and so we see a good, stable market," he said.
Rivals launch new models
The new plane is aimed at a segment of the airliner market in which Boeing, the world's biggest maker of commercial jets, faces a struggle to catch up to its European rival Airbus, which has sold about 70 A340-500s and A340-600s by launching its aircraft sooner than Boeing.
Airbus, owned by European Aeronautic Defence & Space and by Britain's BAE Systems Plc (BA-), sees the A3XX as its main weapon in the fight to break Boeing Co.'s 30-year dominance in the market for planes with more than 300 seats, where the U.S. company's 747 jumbo has long had the field almost to itself. The European plane maker's owners, the European Aeronautic, Defence & Space Co. and Britain's BAE Systems PLC (BA-), last month agreed to turn the consortium of manufacturers into a limited company, called Airbus Integrated Co.
The double-deck A3XX is expected to cost $12 billion to develop, and has provoked strong debate in the airline industry as to whether there is enough demand for such a huge plane to make its development viable. Airbus has said nine customers, including leasing firm International Lease Finance Co., Air France SA and Singapore Airlines have indicated their interest in buying the plane.
Airbus sees a market for 1,200 aircraft with more than 400 seats over the next 15 years, while Boeing estimates demand at just a third of that level.
The British government is expected to give the Airbus consortium a loan of $750 million to fund the project. Boeing and the U.S. government view such a loan as unfair competition.
"We don't have a problem with loans, but the terms of such loans," said Boeing's Condit. "If they're on commercial terms all is well and good. But the company must accept losses on commercial terms."
The Farnborough air show traditionally offers airplane makers a platform for announcing new orders and attracting maximum publicity. The show attracts more than 300,000 visitors and alternates with Paris to stage the world's biggest aerospace industry gathering. 
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