Korean Air orders Boeing aircraft worth $5.5 bln http://today.reuters.com/news/articlebusiness.aspx?type=ousiv&storyID=2006-11-21T135424Z_01_SEO230175_RTRIDST_0_BUSINESSPRO-AIRLINES-KOREA-BOEING-DC.XML&from=business
Tue Nov 21, 2006
NEW YORK (Reuters) - Boeing Co. (BA.N: Quote, Profile, Research) scored one of its biggest orders so far this year on Tuesday as Korean Air Co. (003490.KS: Quote, Profile, Research) said it would buy 25 passenger and freighter aircraft worth $5.5 billion, extending the U.S. planemaker's lead over European rival Airbus.
The order, which included options for eight additional planes, brings Boeing's total net orders to 847 so far this year. Airbus, struggling with an array of design and production problems on its commercial jets, had only 508 orders for 2006 at the end of last month.
Boeing shares rose 50 cents to $89.62 in pre-market trade, a penny off the all-time high set last week.
The Chicago-based company is staging a dramatic comeback after being beaten by Airbus for the past five years. This year, it is dominating the lucrative market for wide-body planes with its well-established long-range 777, redesigned 747 jumbo freighter and its new, medium-sized carbon and titanium 787 Dreamliner.
Airbus, which is majority-owned by aerospace group EADS (EAD.PA: Quote, Profile, Research), has delayed deliveries of its A380 superjumbo by two years, and is struggling to pin down a final design for the mid-sized A350, its competitor to Boeing's 787.
Under the leadership of new Chief Executive James McNerney, Boeing has also settled long-running U.S. government probes into its defense contracting practices. In the last two months Boeing's resurgent defense unit has racked up more than $17 billion in orders for U.S. Air Force helicopters and border protection equipment.
KOREAN AIR EXPANDS
Korean Air, the world's biggest air cargo carrier last year, said in a statement it agreed to buy 15 passenger aircraft and 10 freighters from Boeing to meet growing travel demand and replace its older planes. The world's passenger and cargo market will grow 5 percent to 6 percent each year in the next two decades, accelerated by China's liberalization of its aviation market, South Korea's top airline said.
Korean Air, with a fleet of 118 aircraft, aims to become one of the world's top 10 passenger carriers by 2010. Its shares fell 1.9 percent to 35,450 won in Seoul.
The carrier ordered 10 777-300ERs and five 737-900/700 single-aisle passenger planes, along with five 747-8 and five 777-200 freighters. Korean Air has options for eight additional aircraft, including four 777-300ERs, two 747-8Fs and two 737-900ER planes.
The order, will "enhance the carrier's operation efficiency through modernization of the fleet and reduction in fuel and operational costs," Korean Air said.
The aircraft will be delivered between 2009 and 2019, Korean Air said. Engine contracts will be agreed later, it said.
Korean Air also has a contract to buy five A380 jets from Airbus for delivery starting in late 2007 through 2009, but the start date has been pushed back to 2010, Korean Air officials said.
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