Boeing bags $18bn Qantas order

The mega order worth about $18 billion by the Australian flag carrier is a huge confidence booster for the US aerospace giant which has been trying to regain ground lost to its arch European rival and the world’s leading commercial aircraft maker.

Boeing’s latest order for the Dreamliner 787 follows its recent successes in the Asia Pacific region that both the US jet maker and Airbus have identified as a key battleground for new sales orders.

“It’s a massive win for Boeing and adds to the recent coup in China,” Shukor Yusof, an aviation analyst with Standard and Poor’s in Singapore, said.

“Impressive to see how Boeing has very quickly turned the tables on Airbus,” he said, adding that the US company now holds the edge over Airbus on wide body aircraft sales in the region.

Chinese deal

In November Boeing signed a $4 billion deal to supply 70 737 aircraft to eight Chinese airlines. That deal followed an announcement in January that Boeing was selling 60 787 passenger jets to China for $7.2 billion.

But last week, China, the world’s fastest-growing major aviation market, signed its biggest-ever deal with Airbus when it ordered 150 mid-range A320 planes worth nearly $10 billion at list prices during a visit to Paris by Wen Jiabao, Chinese Prime Minister.

Interior of the 7E7 Dreamliner

The Qantas deal with Boeing was the biggest single order for the 787 jet which Boeing says uses 20% less fuel than other planes of the same capacity.

Raymond Francis, Boeing’s director of communications in Singapore, said the 787 “continues to draw strong response from many airlines”.

According to analysts, the stakes for Boeing to secure the Qantas deal were especially high as the Australian carrier has been picking Airbus jets in recent years.

“It’s an enormous boost (for Boeing) … if Airbus had won, it would have been much more painful for Boeing,” said Peter Harbison, executive chairman of the Centre for Asia Pacific Aviation in Sydney.

“If Boeing lost this one, it would have been very tough,” he said.

Purchase rights

The Australian flag carrier said it was ordering 65 of the twin-engine, wide-body aircraft for delivery from 2008 for use by Qantas and its budget offshoot Jetstar, which is due to begin international operations in 2007.

It also took purchase rights for an additional 50 787’s to account for future growth of its fleet.

Boeing has sewn up several Asia orders for the Dreamliner

The Qantas decision was seen as a huge blow for Airbus, which had pitched its fuel efficient A350 as ideal for Qantas’ needs, although the European jet maker maintained the Australian carrier had the right to choose its planes.

Qantas chief executive Geoff Dixon said the tender had been “very competitive, with excellent options proposed by both Boeing and Airbus”.

Dixon said one of Qantas’ priorities in choosing Boeing was the need to have Jetstar ready for international operations by early 2007 “with the fastest possible transition to new technology, more efficient aircraft”.

He said the decision was difficult, but the board had decided on Boeing based on price, “groundbreaking” technology, fuel efficiency and range of the aircraft as well as the company’s ability to deliver the planes by 2008.

Airbus, based in Toulouse, France, is a subsidiary of the European Aeronautic Defence and Space Company. It is owned 80% by EADS and 20% by British company BAE Systems.