New Orders Boost Boeing Stock Company Lands Sole-Supplier Contract With Continental, Adds To Backlog

Boeing Co. shares rose to a record high as airlines detailed plans to buy billions of dollars of aircraft and customers ranging from Continental Airlines Inc. to golfer Greg Norman ordered new jets.

Boeing shares jumped $1.50 to $57.50 after Continental placed a $4 billion order and became the third major airline to make Boeing its exclusive supplier for the next 20 years. Norman ordered a personal plane from Boeing Business Jets, adding the cachet of one of the golf world’s biggest money winners.

AMR Corp.’s American Airlines confirmed plans to buy seven Boeing 777s as part of an exclusive 103-airplane order. British Airways Plc reminded investors that it plans to buy 43 Boeing jets worth $6.4 billion in the next three years.

“The news is all good,” said Bill Whitlow, manager of Safeco Corp.’s Northwest Fund, which has about 5 percent of its $50 million invested in Boeing shares. “I think the stock is cheap.”

The news follows Monday’s order for $1.7 billion in Boeing freighter jets by Atlas Air Inc. and extends the Seattle-based aircraft maker’s dominance of the industry. The largest maker of commercial jetliners may announce even more big orders at next week’s Paris Air Show, analysts said.

Europe’s Airbus Industrie, the No. 2 jetliner maker, has criticized its rival’s exclusive agreements as anti-competitive. The European Union, in a move to defend the Airbus consortium, has said Boeing’s $15.5 billion plan to buy planemaker McDonnell Douglas Corp. is anti-competitive.

The criticism helped push down the stock of Seattle-based Boeing for much of 1997, before the shares began climbing late last month on expectations of more orders.

Boeing has locked up three of the world’s largest airlines as exclusive customers, guaranteeing the Seattle company a steady stream of business for the next two decades.

American signed its sole-supplier agreement with Boeing in November, and Delta Air Lines Inc. followed in March with a similar one that starts with 106 planes valued at $6.7 billion.

Boeing’s new 777 aircraft “is the new standard in the market,” Continental Chief Executive Gordon Bethune said in an interview. “We need to have it to be competitive.”

Boeing could be slowed, however, by the European Union’s actions, analysts said. While the Europeans can’t block the McDonnell Douglas purchase outright, the Union could levy large penalties on Boeing’s business in Europe.

Still, many analysts and investors said they expect airlines to order more aircraft from Boeing. Several will probably announce orders next week at the Paris Air Show, a traditional venue for unveiling big purchases.

Beyond that, there are certain to be more orders coming in the next several years because the orders announced so far have been mostly for aircraft to replace older planes, analysts said. With air traffic growing in Asia and elsewhere, airlines will need even more planes, they said.

“Aircraft orders for growth are coming,” said Ross Stonesifer, senior analyst at American Express Financial Advisors in Minneapolis, which owns about 6 million Boeing shares.