JAL Orders Up to $9.34 Billion of Boeing Planes : Airlines: The Japanese carrier’s order and options for 54 of the 747-400s will give a big boost to the U.S. balance of trade.
Japan Air Lines, which already owns more Boeing 747s than any other airline in the world, Thursday placed firm orders for 20 of the latest 747-400s and took options on 34 more in a transaction that could ultimately be worth $9.34 billion.
If all of the options are exercised, the last of the planes would delivered in 1999.
JAL has already taken delivery of five 747-400s and is awaiting delivery of 15 others from an earlier order.
The orders will give an important boost to the U.S. balance of trade. JAL said it spent $1 billion in the United States in 1989, making it--for the 20th year in a row--the largest single foreign corporate purchaser of American goods and services.
From 1970 to the end of 1989, JAL says, it spent more than $14 billion in this country. The total included everything from purchases of planes, engines, spare parts and fuel to airport landing fees, terminal space rent and salaries of American-based personnel. During the period, according to JAL, it earned revenue of $4.9 billion in this country. Thus the amount remaining in favor of the U.S. balance of payments was about $9.2 billion.
“We are very pleased at Boeing’s success and at the recognition on the part of JAL that the U.S. makes the best aircraft in the world,” said J. Michael Farren, under secretary of commerce for international trade, through a spokeswoman. “We hope this sets a trend for other equally competitive U.S. industries in their efforts to penetrate the Japanese market and that that trend will be reflected in the trade statistics.”
The new JAL transaction pushed Boeing 747 orders above the 1,000 mark, the Seattle-based company said. Since Pan American World Airways took delivery of the first one Dec. 13, 1969, Boeing has received firm orders for 1,002 747s of all types, including 279 for the 400 version.
Only three other civilian airliners have generated more than 1,000 orders--Boeing’s 727 and 737 and the McDonnell Douglas MD-80 series.
Boeing has delivered 70 of its 747-400s since the first one was completed at the Everett, Wash., assembly plant on Jan. 26, 1989. The leadoff customer was Northwest Airlines, which ordered 10.
The 747-400 has the same fuselage dimensions as the 747-300 but has greater range, better fuel economy and lower operating costs. (All 747s have four jet engines.) It has a range of 8,470 statute miles, an increase of between 1,100 and 1,300 miles over the 747-300. According to Boeing, it also uses 9% to 12% less fuel than the earlier model. Boeing says the 400’s range allows it to fly nonstop with a full passenger load on such routes as London-Tokyo and Los Angeles-Hong Kong.
JAL said each of the planes in the new order, including the engines, would cost $167 million. The airline has been flying its first five 747-400s only on flights within Japan or to nearby South Korea so its crew members can gain experience with the craft before venturing further.
In August, JAL said, it will begin flying the plane between New York and Tokyo, and in the fall it will inaugurate nonstop 747-400 service between Tokyo and several European cities, including Paris and Frankfurt, West Germany.
JAL now has 66 747s, 20 DC 10s (the largest DC-10 fleet outside the United States), 3 767-200s and 11 767-300s.
Boeing’s total jet orders since the beginning of the jet era in the late 1950s stand at 7,747, of which 6,050 have been delivered. The manufacturer’s total backlog now stands at 1,697 planes. It has delivered 145 so far this year.
Boeing’s largest single firm order, for $9.4 billion, came April 18, 1989, when GPA Ltd., an Irish airplane-leasing company, ordered 182 planes. United Airlines placed an order with Boeing six days later for 180 planes valued at $15.74 billion. Of that, $7.11 billion represented firm orders, with the rest for options.
JAL’S SPENDING IN THE U.S.
Chart lists outlays from 1970 through 1989
Aircraft purchases: $5,342,172,000
Aircraft parts: 2,363,063,000
Aircraft engine purchases: 166,361,000
Aircraft rentals: 199,243,000
Other related purchases: 123,632,000
Fuel: 2,648,214,000
Landing fees: 75,432,000
Total aircraft purchases and operations expenses: $10,918,117,000
Flight operations and traffic services expenses: 432,093,000
Passenger and cargo service expenses: 458,790,000
Maintenance expenses: 137,441,000
Salary and wages: 1,005,060 000
General office expenses: 1,052,682,000
Acquisition costs and general fixed assets: 68,965,000
Total other expenses: $3,155,031,000
TOTAL EXPENDITURES: $14,073,148,000
