May 7, 2010 in Business

777s get big boost

Boeing reveals $3 billion order for 20 jets, says more deals in the works
Dominic Gates The Seattle Times
 

SEATTLE – Boeing revealed Thursday a massive order for 20 widebody 777 jets, worth at least $3 billion in real market value.

It’s the biggest jump in orders so far this year, and was booked within the past week. Boeing added the order to its website in a routine update.

Boeing will not say if the unidentified customer is a single airline or more than one customer. Many airlines like to reveal big airplane orders in a splash of publicity at the annual European air show, which this year is in July at Farnborough near London.

The mystery order for 20 of the large twin-aisle 777s is worth something more than $5 billion at list prices, depending on the precise model. The estimated true value of about $3 billion is based on market pricing data from aircraft valuation firm Avitas.

Next month, the production rate for 777s in Everett will be reduced from seven a month to five, a decision Boeing made last year as the global economic crisis hit its airline customers and shrunk air traffic. But the company announced in March that the 777 rate will go up again to seven a month in the middle of next year.

In Boeing’s first-quarter earnings call last month, CEO Jim McNerney said more 777 orders were in the works but that the timing of announcements would be decided by the customers.

“There are some unannounced orders. … And there are some ongoing discussions where we have high degree of confidence that are going to turn into orders,” McNerney said. “I’m being a little coy here, but I do want to respect our customers’ wishes. We are comfortable that the demand will support moving the rate up.”

Separately, Boeing this week removed from its tally four pending 777-200ER orders for Israeli flag carrier El Al.

Also on Thursday, Boeing disclosed a previously booked 2009 order from new customer RwandAir – the national carrier of Rwanda – for two 737-800s, a sale worth $154 million at list prices, or an Avitas-estimated $93 million after standard discounts. Those airplanes are to be delivered in 2011.

So far in 2010, Boeing has booked 134 new orders with 22 cancellations, for a net total of 112 new airplane sales.


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