Boeing Gets 50-Jet Order for New 7E7 Dreamliner

Boeing Co. officially launched its 7E7 Dreamliner passenger jet Monday after Japan’s All Nippon Airways Co. placed the first order for the fuel-efficient, dolphin-shaped plane that Boeing hopes will help it regain supremacy in the commercial aviation market.

The order for 50 jetliners is the largest by a single airline in the history of Boeing, which valued it at $6 billion based on 7E7 price lists. But aerospace industry analysts said the final price tag for ANA probably would be closer to $4 billion, because so-called launch customers typically receive huge discounts.

“It’s a historic moment for us,” said Mike Bair, Boeing’s senior vice president for the 7E7 program.

When it enters service in 2008, the 7E7 will be the Chicago-based company’s first new line of commercial aircraft since 1995 and could help end a drought. Last year, Boeing for the first time sold fewer aircraft than its primary rival, Europe’s Airbus. It marked a stunning reversal from eight years ago, when 4 out of every 5 new passenger jets were made by Boeing.

The size of ANA’s order also could bolster Boeing’s contention that airlines will want fuel-efficient mid-size planes that can take off from smaller airports and fly directly to distant locations in Asia or Europe. By contrast, Airbus has bet that carriers are eager for ever larger airplanes. It has begun making the A380 super-jumbo jet, the world’s largest airliner, with room for 555 passengers.

The ANA order represents “a solid start for the 7E7 program, and additional orders this year could strongly validate the attractiveness of the aircraft,” said Byron K. Callan, aerospace analyst for Merrill Lynch.

Analysts believe that Boeing will spend $6 billion to $8 billion to develop the new airplane. Production of the 7E7 is expected to begin in 2006 in Everett, Wash., where Boeing manufactures its largest commercial jetliners: the 767, 777 and 747.

No major component for the 7E7 will be made in Southern California, though local suppliers are likely to have some role, albeit small, in producing the aircraft. Boeing is the largest private employer in Southern California, with about 36,000 employees.

Many analysts expected a Japanese airline to be the launch customer because Boeing had agreed to have as much as 35% of the 7E7, including the wing section, produced in Japan. Mitsubishi Heavy Industries Ltd., Kawasaki Heavy Industries Ltd. and Fuji Heavy Industries Ltd. all will build major parts of the Dreamliner.

Boeing struck those partnerships to help reduce its production costs. Bair insisted Monday that there was “no linkage of any kind” between the manufacturing arrangements and the order from a Japanese airline.

“It’s hard to imagine that airlines would buy something that didn’t fit their needs,” Bair said. “In the end, the product has to stand on its own.”

Boeing expects orders for the 7E7 from at least a dozen airlines this year, Bair said, including a couple in the U.S. Most U.S. carriers are struggling financially and have been reluctant to commit to orders for the new model, prompting Boeing to concentrate on marketing the plane in Asia and the Middle East.

The last new Boeing plane was launched in 1990, when the company decided to develop the twin-aisle 777. The first operational 777 was delivered to United Airlines in 1995. Since then, Boeing has scrapped plans to develop a larger version of the 747 jumbo jet and a super-fast “Sonic Cruiser.”

Aiming to counter Airbus’ momentum, Boeing last year announced plans for the 7E7. It will be lighter, roomier and more fuel-efficient than any similar-sized aircraft in service, largely because of the use of more-advanced electronics and composite materials instead of metals.

Boeing said the twin-aisle 7E7 -- the “E” stands for efficiency -- would burn as much as 20% less fuel than other mid-size airliners now in service.

ANA’s order includes a mix of short-haul 7E7s, which will have 300 seats and a range of about 4,000 miles, and a longer-range version with 230 seats and a range of about 9,000 miles.

The 7E7 will replace ANA’s aging 767s and Airbus A321s, the airline said. ANA is the largest operator of 767s outside the U.S.

ANA executives said they expected to save $90 million a year in operating costs by flying 7E7s.

“The 7E7 meets ANA’s requirements in safety, reliability, comfort and economics,” said Yoji Ohashi, the airline’s president and chief executive.

Shares of Boeing rose 79 cents Monday to $43.24 on the New York Stock Exchange after the deal was announced.