Boeing Wins $18 Billion Qatar Deal in Blow to Airbus

Providing a sales boost to the U.S. company’s upgraded 737 jetliner with one of the year’s largest commercial airplane deals, Boeing Co. landed an $18.6 billion deal with Qatar Airways for as many as 100 aircraft.

Marking its first narrow-body order with Boeing since 1979, the Doha-based carrier pledged to buy as many as 60 of the 737 Max 8 jet, valued at $6.9 billion at list prices. Akbar Al Baker, the airline’s chief executive officer, and Boeing commercial airplane CEO Ray Conner said Friday in Washington that Qatar Airways also ordered 40 total 777 and 787 Dreamliner twin-aisle aircraft.

After rejecting initial A320neo deliveries from Airbus Group SE because of engine issues, Al Baker made good on earlier threats to buy Boeing’s 737 Max with the commitment. Boeing jet, which is on pace to begin commercial service months ahead of schedule in the second quarter next year, was provided a vote of confidence by the transaction.

Al Baker said in an interview that Qatar Airways will take its first Max in 2018. The decision to pivot to the rival Boeing model wasn’t intended as retaliation against the European planemaker, he insisted.

“There is no message to Airbus. We don’t send messages by aircraft purchases to each other,” he said.

Trading 0.2 percent lower at $134.07 at 2:52 p.m. in New York, Boeing pared a drop of as much as 1.4 percent before the Qatar Airways announcement. Airbus declined 1.1 percent to 53.83 euros at the close in Paris before falling as much as 2.1 percent as news of the order broke.

Chicago-based Boeing has been contending with sales slowed by economic uncertainty in Europe and Asia and a commodities downturn in Russia and Brazil, like Airbus, and the order gives it a boost.

A glut of second-hand models and a demand for new, fuel-efficient wide-body jets such as the 777 and 787 have been dampened by relatively low fuel prices.

Al Baker said that Al Baker said is intended to be followed up by Qatar Airways. But saying the delays left him with “no alternative” but to order the “reliable” Boeing narrow-body planes, he also took a swipe over issues with the aircraft’s geared turbofan engine, which is made by United Technologies Corp.’s Pratt & Whitney unit.

“We never renege on contracts that we sign. The aircraft that we are ordering today will serve this ever-expanding network,” Al Baker said.

Valued at a combined $11.7 billion at list prices before discounts that are customary for large aircraft purchases, Bottom of Form

Qatar is also ordering 30 of Boeing’s 787-9 model and 10 777-300ER jets. In addition to the Dreamliner, the company’s marquee carbon-fiber jet, a little more visibility into plans for the 777, the planemaker’s largest twin-engine aircraft, is provided by Boeing’s largest twin-aisle sale this year.

Whether a dearth of orders will force it again to slow assembly of current-generation 777 models before an upgraded version debuts in 2020 and whether Boeing boosts Dreamliner output would be determined by the current sales campaigns, Boeing CEO Dennis Muilenburg said last month.

(Adapted from Bloomberg)


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