Boeing roars ahead thanks to Asian carriers

Boeing roars ahead thanks to Asian carriers

As plane deals go, this could well be the biggest prize in recent memory. In December, three major Asia-Pacific carriers are expected to place orders for more than 100 wide-body jets worth an estimated US$16.8 billion. And by the looks of things, Boeing looks poised to supply most of the planes.

The Chicago-based aerospace company has been on a roll lately, racking up orders at a phenomenal pace for its 787 Dreamliner – and the new jet could account for half of the Asia-Pacific orders. But Boeing also is getting some unexpected lift from another plane: the 777.

Thanks to the rise of its two most fuel-efficient widebody jets at a time of rising energy prices, Boeing has a potent one-two punch that could knock European rival Airbus into second place for years to come. Says Randy Baseler, Boeing vice-president for marketing: “We feel very confident about our strategy.”

Of course, in the bare-knuckles aviation game, a Boeing triumph is hardly assured. Airbus, famous for aggressive sales tactics, could swoop in at the last minute and undercut Boeing on price.

But if Boeing wins all or even most of the Asia-Pacific orders, as many insiders expect, this could provide a major boost to the commercial side of its business, even as defence goes into a trough. While Boeing’s third-quarter revenues and earnings suffered because of a four-week strike earlier this year at its commercial-airplane unit, the company raised its earnings outlook for this year and next, citing stronger demand for commercial airplanes.

A big win in the Asia-Pacific region could add to Boeing’s backlog of $98 billion worth of new planes and boost operating profits by $3.5 billion over the next five to seven years. Even better, a victory would further validate Boeing’s twin-engine, point-to-point strategy — based around the idea that carriers prefer to fly smaller, more fuel-efficient planes nonstop between two far-flung destinations.

Boeing’s resurgence comes at a time when Airbus is stalling badly. Delivery delays of its 555-seat A380 super-jumbo jet have angered key customers. And an inability to settle on the final design of its new A350 has given the 787 and 777 an even bigger head start.

More troubling yet for Airbus: Its four-engine A340 is deemed a gas-guzzler. “Boeing sees Airbus as weak, and they’re right,” says Doug McVitie, an aerospace consultant who used to work for the European jetmaker. “Airbus has had a terrible year.”

Wires.