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Boeing Books Exclusive Ticket With Continental

From Associated Press

Boeing Co. has won a third deal to be an airline’s exclusive aircraft supplier, this time a 20-year pact with Continental Airlines.

As part of the announcement Tuesday, Continental said its first order would be for 35 wide-body jets worth about $4 billion.

The sole-supplier deal is similar to ones Boeing signed in March with Delta Air Lines and in November with American Airlines. United Airlines has said it is considering an exclusive agreement.

The arrangements have angered Boeing’s only commercial-jet competitor, Europe’s Airbus Industrie, and are at the heart of complaints by the European Union over Boeing’s planned $14-billion acquisition of McDonnell Douglas Corp.

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Airlines like the sole-supplier arrangements because they offer favorable prices, predictability and the chance to easily substitute other aircraft as conditions change. Having aircraft from one supplier in a fleet also lets airlines save on parts, maintenance and training.

AMR Corp.'s American chose Boeing to be its sole supplier of up to 630 jets over the next 20 years. On Tuesday, it confirmed an order for seven Boeing 777 aircraft to be delivered in 1999 and 2000. The airline also said it acquired purchase rights for more 777s in late 1999, 2000 and 2001. Last month, American finalized terms for firm orders and purchase rights for the 737, 757 and 767 aircraft that form the bulk of its Boeing order.

Delta has agreed to buy 106 Boeing planes worth about $6.7 billion by 2006, with options to buy 538 more over the next two decades.

The Continental deal, still to negotiated and finalized, would have the Houston-based airline buy all its new jets, other than small regional craft, from Seattle-based Boeing over 20 years.

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The order announced Tuesday covers five 777-200s in addition to the five Continental already has on order. It also is ordering 30 767-400ERs, a new stretched version of the extended-range 767 that Boeing authorized in January.

Continental, the nation’s fifth-largest airline, said the new planes will be used to replace its fleet of six DC10-10 and 31 DC10-30 aircraft, which are about 20 years old. The 777s will be delivered in 1998 and May 1999, and the 767s from mid-2000 through 2004.


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