Boeing Beats Airbus In Contest For $4 Billion Order Malaysian Airline System Signs Deal For 25 Planes With Seattle-Based Aerospace Giant

Boeing Co. shut out European rival Airbus Industrie by winning a $4 billion order for 25 jets from Malaysian Airline System Bhd.

It’s the second time in three months that Boeing dominated a major jetliner order in Asia, one of the fastest-growing regions for passenger air traffic. Malaysia’s flag carrier said it couldn’t afford too many kinds of aircraft in its fleet, which consists mainly of Boeing jets.

The Malaysian rebuff is painful for Airbus, since the carrier already has five Airbus A330 jets on order, with options to purchase six more. A follow-up order would help establish Airbus as a regular supplier to Malaysia.

“The fact they were knocked off is obviously bad news to Airbus,” said Nick Cunningham, an aerospace analyst at Barclays de Zoete Wedd in London.”Malaysia already bought A330s and you’d expect them to buy more.”

On Tuesday, Boeing confirmed that United Airlines has ordered two 747-400s worth $148 million to $177 million apiece. The two new planes will be delivered in 1997. Along with two other 747-400s scheduled for delivery this year, the new planes will give United a fleet of 28 of the jets.

The world’s largest maker of commercial aircraft has been on a roll since last year, when it won 70 percent of all new aircraft orders. The year before, Airbus chalked up more orders than Boeing, suggesting the Seattle-based aircraft giant was losing its dominance.

Many analysts expected Boeing to win most of the Malaysian order. In November, it had a clean sweep at Singapore Airlines Ltd., which ordered up to $12.7 billion worth of Boeing planes.

Malaysia Air’s choice of Boeing may suggest Airbus’s costs are too high, its jets aren’t as desirable, or that Boeing cut its prices more than Airbus could, analyst Cunningham said.

“Obviously we’re disappointed,” said David Velupillai, a spokesman for Airbus in France. “Malaysia Airlines remains a large A330 operator and we were pitching for the deal.”

Velupillai denied a report Monday in the Times of London that Airbus offered to cut its A330 price 40 percent to win the order. He didn’t discuss details of Airbus’s bid.

Malaysia Airlines bought 10 Boeing 747-400 jets, the biggest jetliner in the world. It also will take delivery of 15 of Boeing’s newest jet, the 777, beginning in May 1997. Malaysia Airlines owns a total of 96 planes. Among the 96, 65 are made by Boeing and 11 are made by Airbus.

“There was only going to be one winner,” said Tajudin Ramli, the chairman of the company that operates Malaysia Airlines. “We can’t afford to have too many types of aircraft in our system. It would be very expensive.”

The news marks the third multibillion-dollar order by a Southeast Asian flagship airline in as many months. Last month Philippine Airlines Inc. ordered $2.7 billion in planes from Boeing and Airbus. Taiwan’s China Airlines in December ordered 15 of Boeing’s 737-800 jets for $750 million.

Rolls-Royce Plc of London will supply its Trent engines to power the 777 jets while Pratt & Whitney, a unit of United Technologies Corp., will install engines for the 747s. The Malaysian airline said it also has options to purchase another five planes, two 777s and three 747-400s.

“It’s a very significant order,” said Jerry Johnson, a Boeing spokesman. “It was highly competitive.”

Analysts said Asian airlines are taking advantage of aerospace companies’ recent difficulties to win discounts.

“All three manufacturers are coming out of a very deep recession,” said Shane Matthews, an aerospace analyst at James Capel & Co. in Singapore, referring to Airbus, Boeing and St. Louis-based McDonnell-Douglas Corp. “To get orders they’ve been forced to give very steep discounts.”