Boeing Co. said Wednesday that it has agreed to sell 20 of its 747-400 airliners to Japan's All Nippon Airways for $3.15 billion, the largest deal yet for the new line of jumbo jets.
Executives at the Seattle aerospace firm characterized the sale as a sign of industry confidence in the 747-400 model. Initial deliveries of the jets have been delayed by manufacturing problems and heavy demand.
Boeing said deliveries of the jets to ANA, which is Japan's largest airline, will begin in 1992. ANA will pay for each jet upon delivery.
The agreement is the latest in a series of deals for the new, more fuel-efficient 747, which has a different wing design and flies about 1,000 miles farther than previous 747 models. The plane carries up to 600 passengers.
Boeing has taken orders for 192 of the jets since it began to work on the new series in October, 1985. The company made its first delivery--a 747-400 purchased by Northwest Airlines--last month.
Boeing spokesman Craig Martin said the company has no plans to increase its work force as a result of the ANA order.
The production schedule for the 747-400 series has been an issue since last October, when Boeing informed airlines that deliveries would be delayed for several months. The company was expected to deliver about 50 of the jets this year. Instead of delivering at an even pace throughout the year as planned, Boeing will deliver most of the jets in the last six months of the year, Martin said.
Some analysts had predicted that demand for the jets would decline in response to the delays, but Martin said the deal with ANA would bolster the company's image.
"The sale is a reconfirmation of the importance the 747-400 is taking in the industry," Martin said. "It's important because the Japanese are demanding taskmasters when it comes to the quality of the plane."
William Whitlow, an analyst at Dain Bosworth in Seattle, said the sale should dispel doubts about prospects for the new jet.
"Boeing had a lot of problems, and those problems received a lot of attention," Whitlow said. "Those who thought this was a serious problem could see this as a confidence-builder."
The deal is the fifth-largest sale in Boeing history. But the order will have no immediate impact on the company's revenue because the payments will not be received for several years, said John Simon, an analyst at Seidler Amdec in Los Angeles.
New orders at Boeing have reached record highs in each of the past four years, hitting $30 billion in 1988. But Simon said Boeing will probably receive only about $20 billion in new orders this year because airlines have addressed much of their future aircraft needs and are awaiting deliveries. So far, Boeing has received $4.6 billion in orders in 1989.
Boeing reported net income of $614 million on revenue of $17 billion in 1988. Simon predicted that the company will report net income of $970 million on revenue of $22 billion in 1989.
The sale was ANA's second order of 747-400s. Last year, the airline ordered six. Boeing was scheduled to deliver its first 747-400 to ANA in July, but the date has been extended to August, said Koji Yamashita, manager of ANA's western operations. Yamashita said ANA executives from Japan would meet soon with Boeing executives in an effort to expedite deliveries.
Another airline affected by the production delays--Japan Air Lines--said it is seeking compensation from Boeing because deliveries of its first five 747-400s will be delayed two to three months.
JAL may sue Boeing to obtain compensation or try to negotiate a reduced purchase price, said Tad Fujimatsu, a JAL spokesman, but a decision has not been reached.
In another transaction, Boeing said ANA is also negotiating the purchase of 15 to 20 of Boeing's smaller model 767-300 jets for $1.2 billion to $1.6 billion.