Boeing Wins 1st Orders For 737s At Dubai
Tue, 11/17/2009 - 7:00am
Adam Schreck, AP Business Writer

DUBAI, United Arab Emirates (AP) -- Boeing scored its first orders at the Dubai Airshow on Tuesday with requests for 11 737-800 jetliners, while the United Arab Emirates military inked two defense deals with European manufacturers.

The UAE armed forces requests from Sweden's Saab and Switzerland's Pilatus covers aerial radar and training aircraft worth about $725 million.

Boeing had lagged on commercial orders behind European rival Airbus, which announced deals every day since the show began Sunday. Airbus picked up a handful of additional orders of its own Tuesday, including one for planes that will break occupancy records for packing well over 800 passengers in.

Marty Bentrott, Boeing senior vice president in charge of sales for the region, called Tuesday's pair of deals "a great success," but downplayed the timing of the announcement by reiterating Boeing's position that it doesn't save up orders to roll out at airshows.

"It just so happened that we had recent success with two customers," he told The Associated Press in an interview. "They were in a position that they were comfortable in announcing, so the timing was right."

The orders added some competitive flair to a muted dealmaking climate at this year's event.

Airbus' first announcement of the show, the Middle East's biggest, was little more than a formal signing ceremony for an order that effectively had been sealed months earlier. The company's latest two orders were for just two planes each.

For both manufacturers, the Dubai event has lacked the blockbuster numbers of the last show two years ago -- a reflection both of the slumping aviation market and the staggering backlog of existing plane orders from fast-growing carriers in the oil-rich Gulf region.

Organizers say the 2007 Dubai Airshow saw $155 billion worth of deals. Analysts expect manufacturers to score only a fraction of that amount this time around.

"We went into this show very open-minded that, given the current market environment, we were not going to see a lot of order activity. And we haven't," Bentrott said. "We just haven't seen the numbers. And Airbus hasn't seen the numbers either."

Both of Chicago-based Boeing's orders came from airlines backed by the Algerian government.

Seven of the planes will be used by the North African country's national flag carrier Air Algerie, eventually bringing the airline's 737 fleet to 22 planes.

Tassili Airlines ordered the other four 737s. That carrier is fully owned by Algeria's state-owned oil company Sonatrach, which plans to use the planes to transport employees and cargo to work sites.

Boeing did not provide a value for the deal. The workhorse planes sell for between $72.5 million and $81 million at list prices, but buyers typically negotiate discounts, particularly in tough financial times.

Bentrott said he did not expect Boeing to announce additional "significant orders" between now and the end of the show.

Boeing's main competitor Airbus also added to its order tally at the show with a pair of relatively small deals.

The Toulouse, France-based company said it got orders from Air Austral for two "high density" Airbus A380s that each will be packed by about 840 seats -- easily the most passengers to fly in a single airplane. It valued each plane at $330 million to $335 million at list prices.

The airline, based on the French island of Reunion in the Indian Ocean, plans to offer only economy class on the planes for flights between the territory and Paris.

Airbus Chief Operating Officer John Leahy stressed that such a full plane would not be unsafe or feel excessively cramped.

"The passenger on board this airplane will have a bigger, more comfortable seat than he will have on a smaller airplane flying the same route," he said after signing the deal.

He acknowledged, however, that he has not flown long-haul on such a plane because Airbus has never flight-tested the 10-seat-abreast configuration.

Airbus also signed orders with Nepal Airlines for an A320 and an A330 plane. The airline said it has options for six additional aircraft.

The Nepal Airlines deal, valued at $250 million, is Airbus' fourth order at the show.

Also Tuesday, Embraer said it sold five 175 regional jets to Oman Air in the Brazilian plane maker's only deal of the show. Embraer valued the deal at $177.5 million.

The UAE defense deal with Saab calls for two of its model 340 "early warning" aircraft. The turboprop planes, which will be delivered in the second half of 2010 and early 2011, are designed to detect friendly and hostile aircraft over a wide area.

The Emirates also agreed to buy 25 PC-21 turboprop planes and other equipment from Swiss plane maker Pilatus Aircraft to train pilots in advanced aircraft systems.

In recent years, the Emirates has emerged as one of the world's biggest buyers of arms. Defense spending could top $100 billion across the wider Middle East annually by 2014, according to market research firm Frost & Sullivan.

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