Lufthansa to Order 20 Boeing 747s
The Wall Street Journal 12/05/2006
Author: J. Lynn Lunsford
(Copyright (c) 2006, Dow Jones & Company, Inc.)
In a major boost for Boeing Co. at the expense of its European rival, longtime Airbus customer Deutsche Lufthansa AG could announce as soon as Wednesday that it will be the first to order the passenger version of Boeing's updated 747 jumbo jet.
According to people familiar with the situation, Lufthansa has agreed to place firm orders for 20 planes, as well as taking options for 20 more. The firm orders are valued at more than $5 billion at list prices, although launch customers typically win steep discounts.
The move is an especially harsh blow to Airbus because Lufthansa, in 2001, was among the first customers for the A380 superjumbo, which Airbus has marketed as a replacement for old 747s.
The selection of the 747-8 intercontinental jets by Lufthansa, a carrier widely respected for its fleet choices, could prove pivotal for the Boeing model in its duel with the doubledeck Airbus A380.
Major carriers that currently fly older 747s and have not bought A380s - including British Airways PLC, Hong Kong's Cathay Pacific Airways Ltd. and UAL Corp.'s United Airlines -- may now feel more comfortable sticking with the updated 747 instead of switching to the new A380.
Although something could happen at the last minute to delay or derail the deal, Lufthansa's board is scheduled to meet Wednesday to give the deal final approval, these people said. Executives at the carrier and Boeing reached a handshake agreement late last week.
The Lufthansa deal, if confirmed, would bring Boeing's tally for widebody jetliner orders to more than $10 billion in recent weeks. It comes as Airbus, a subsidiary of Franco-German European Aeronautic Defence & Space Co., is struggling to get back on its feet after costly and embarrassing delays on the A380 that sparked months of management upheaval at Airbus and its parent company.
A Lufthansa spokeswoman declined to comment on any pending deals with Boeing, but she said the carrier is "definitely" keeping its orders for the A380. "We see the A380 as our flagship. With 550 seats, it's just a different category of aircraft."
Boeing launched the 747-8 program a year ago, and despite winning orders for 44 freighter versions, the company was feeling the pressure to seal a deal for the more high-profile passenger model.
The 747-8 Intercontinental will be about 29 feet longer than the existing 747-400 and will be powered by the same fuel-efficient General Electric Co. engines that have made the new Dreamliner one of Boeing's best-selling planes. The 747-8 will seat 467 passengers, up from 416 in the older version.
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