Ge Hands Boeing $4 Billion Jet Order
The Boeing Co. on Monday booked its second $4 billion jet order in a month, this time with GE Capital Aviation Services, which ordered 107 jets. The move further underscores a turnaround for the airline business.
GE’s order includes five 777 wide-body jets and 102 Boeing 737s, options for 76 Boeing 737s, and a special agreement that would allow GE, which leases planes and provides financing to 155 airlines, to purchase as many 76 additional 737s later.
A $4 billion order for 25 Boeing 777s was announced Jan. 8 by Malaysia Airlines. In November, Singapore Airlines also announced orders for Boeing jets worth more than $4 billion, setting off a wave of new orders that signaled a turnaround in the industry. GE’s order is the first major booking from a domestic customer in the latest flurry of activity.
GE’s order is not expected to affect short-term hiring or production at Boeing. The order was taken into account when new, higher production rates for later this year were set last month, said Nick Milham, Boeing spokesman. The company plans to boost production by four airplanes per month, from 20 to 24, by the end of this year.
GE Capital Services is a subsidiary of General Electric Co. It took over some of the operations of the Irish leasing company, GPA, when it got into financial difficulty as the airline business soured in the early 1990s.
Monday’s order includes 20 of the current 737 models, with the first delivery set for late this year (delivery of the 777s will begin in 1999). That will help to keep production lines steady as the Renton, Wash., plant gears up to begin producing its new-generation models that will go into service in the fall of 1997. The other 737s ordered are for those later models. GE plans to take delivery of 25 airplanes per year.
Jim Johnson, president of GE Capital Services and a former Boeing vice president, said the special arrangement allowing for additional orders gives his company flexibility by enabling it to buy all three new 737 models and provide them within short periods of time.