advertising
A little good news for the 787 Wednesday, January 23, 2008 ·

By: Bryan Corliss

Jet Set

The 787 got a nice vote of confidence Tuesday when Air Europa - the same Air Europa that was the launch customer for Airbus' original A350 - announced it has switched to the Dreamliner instead.

The Spanish leisure carrier said it had ordered eight 787s, with rights to buy up to eight more at the same price. Boeing called it a $1.3 billion deal; after discounts, it was probably more like $1 billion.

Way back in 2004, Air Europa became the first buyer for the then-new Airbus A350, signing a memorandum of understanding regarding 10 firm orders, with an option to take two more of the planes.

But after that, A350 sales never took off, and Team Toulouse ended up going back to the drawing board a couple times before settling on the current A350XWB design, which is larger than the originally proposed model.

The XWB is selling quite well, stealing market share from Boeing's 777-200 models. But it's not what Air Europa wanted. The airline never confirmed the MOU, and late last year it quietly ordered 787s instead. The deal wasn't announced till yesterday. Boeing counted it on its 2007 year-end orders totals as a sale to an unidentified customer.

And in a smaller confidence vote, Royal Jordanian Airlines (which has a really sharp-looking livery, by the way) announced today that it had signed papers to lease two 787s for its fleet. Royal Jordanian has ordered four Dreamliners directly from Boeing, and it has now signed leases for another eight.

So, a little good news for the folks in Everett, which is probably welcome, what with the steady drumbeat of headlines about how the delays in 787 deliveries are hurting important customers like Qantas, which has had to delay launch of a new low-cost service to Europe because it won't get its Dreamliners as planned, and Air India, which is scrambling to find 15 jets it can lease to fill the gaps the delays have caused.  

Boeing's going to have to do something to compensate customers for the delays. Jim Wallace at the Seattle Post-Intelligencer raises an interesting point: When Airbus' A380 deliveries were two years behind schedule, instead of paying cash penalties, it offered the customers it had inconvenienced steep discounts if they ordered even more jets. "A few customers," Wallace says, "reportedly received planes for next to nothing."

Wallace says he talked to Airbus sales guru John Leahy about it last year. He says Leahy told him, "If you have money you owe a customer, I always prefer to have coupons that you can use on buying incremental airplanes than just writing a check for cash."

Boeing hasn't said how it plans to compensate airlines for the late deliveries, and it probably won't. But if we start seeing 787 customers ordering 737s or 767s - then we'll know.

Leave a Reply


If you can't read the word, click here.

CAPTCHA image for SPAM prevention

Latest at Washington CEO


advertising

© Washington CEO Magazine 2008