This article from NYTimes.com has been sent to you by psa188@xxxxxxxxx /-------------------- advertisement -----------------------\ Explore more of Starbucks at Starbucks.com. http://www.starbucks.com/default.asp?ci=1015 \----------------------------------------------------------/ Boeing Said to Win AirTran Order July 1, 2003 By EDWARD WONG AirTran Airways reached an agreement yesterday afternoon with the Boeing Company to buy 50 narrow-body jets with an option to purchase 50 more, according to a person who had been briefed on the deal. The order is the second largest this year in volume and was eagerly pursued by Boeing and Airbus, the two major commercial plane makers. The deal is valued at a list price of $4 billion, the person said, though planes are almost always sold at a discount. Most of the 50 planes are 737-700's, and some are the larger 737-800 model. The 737 family is Boeing's most popular plane type, in part because it is the sole aircraft family used by Southwest Airlines, the world's most profitable carrier. AirTran's order validated the plane's popularity, particularly among low-cost airlines. AirTran models many aspects of its operations after Southwest, including quick airplane turnaround times, which help to keep costs down. The airline had a profit of $2.04 million in the first quarter and was one of the few domestic carriers not to lose money. The person briefed on the deal said that up to 14 Boeing 717's could be included in the final package. AirTran now has 64 717's and 8 DC-9's in its fleet. It is gradually phasing out the DC-9's, which are used on short-distance flights. The 737's will give AirTran planes with the range to fly across the country. The 717's cannot reach that far, and AirTran has shown that it is eager to add transcontinental routes. This month, it began service between its hub in Atlanta and Los Angeles with two Airbus A320's that it is leasing from Ryan International Airlines, based in Wichita, Kan. AirTran will buy 28 of the new 737's from Boeing and lease 22 from GE Capital. Those 22 planes will be new aircraft and do not come from GE Capital's existing fleet, said the person briefed on the deal. Trish York, a spokeswoman for Boeing, declined to comment on the deal. Mary Anne Greczyn, a spokeswoman for Airbus, which is based in France, did not return calls seeking comment yesterday evening. Tad Hutcheson, marketing director of AirTran, said that whatever deal the airline had worked out was being completed by the board last night. "We're going to get the best deal for the company," he said, "and the best deal for the airline." Sales executives from Boeing and Airbus had been meeting with AirTran's top executives throughout the week at AirTran's headquarters in Orlando, Fla. AirTran told the representatives from Airbus about 5 p.m. yesterday that Boeing was going to get the deal, said the person briefed on the discussions. Boeing might have had an edge in negotiations because AirTran was already using Boeing planes with some financing from Boeing, said Michael Allen, chief operating officer for Back Aviation Solutions, an airline consulting company in Connecticut. That meant Boeing could be more creative, he said, in whatever prices and payment terms it worked out with AirTran. The AirTran order is the second largest in volume this year after an order placed in April by JetBlue Airways for 65 A320's. JetBlue also worked out an option for 50 more A320's. Low-cost airlines have accounted for a greater proportion of plane orders in recent years as the bigger airlines have stagnated and actually turned to parking excess aircraft in the desert. Before the Paris Air Show in mid-June, low-cost airlines had placed 83 percent of all the orders for narrow-body jets this year, Mr. Allen said. Last year, such airlines were responsible for 73 percent of narrow-body orders. Last year, EasyJet, the low-cost airline based near London, ordered 120 A320's. Ryanair, the Irish low-cost airline, ordered 103 737's last year and 22 this year. http://www.nytimes.com/2003/07/01/business/01AIR.html?ex=1058069098&ei=1&en=f48bd8b5c3d95104 --------------------------------- Get Home Delivery of The New York Times Newspaper. Imagine reading The New York Times any time & anywhere you like! Leisurely catch up on events & expand your horizons. Enjoy now for 50% off Home Delivery! Click here: http://www.nytimes.com/ads/nytcirc/index.html HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@xxxxxxxxxxx or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@xxxxxxxxxxxx Copyright 2003 The New York Times Company