Key lessor sees good start for Boeing 7E7

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Key lessor sees good start for Boeing 7E7  =

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Thursday April 29, 8:04 PM EDT =


By Chris Stetkiewicz

EVERETT, Washington, April 29 (Reuters) - Boeing Co. (BA) is off to a goo=
d start shopping its new 7E7 jetliner, but the aircraft has a long way to=
 go before overtaking the competing mid-sized aircraft from rival Airbus =
SAS (EAD) (EAD), a major aircraft lessor said on Thursday.

"I think the program will get off to a good start. We're confident that B=
oeing will get additional orders this year from some high profile custome=
rs ... and we'll see how Airbus will respond," said Steven Udvar-Hazy, ch=
ief executive of Interational Lease Finance Corp.

Airbus has insisted its A330-200 wide-body could deliver comparable opera=
ting costs to the 7E7, billed as a fuel-sipping money saver for cash-stra=
pped airlines.

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Hazy, a shrewd aircraft buyer who came to Everett, Washington, to take de=
livery of a new jet from Boeing's wide-body aircraft plant, said the A330=
 was a strong competitor to the 7E7.

"My feeling is that airlines will go in both directions," Hazy told repor=
ters, moments after a speech in which he told Boeing employees the 7E7 wo=
uld keep Boeing at the "forefront of commercial aviation for decades to c=
ome."

Boeing this week unveiled its first customer for the wide-body 7E7, Japan=
's All Nippon Airways Co. (9202). But skeptics suggest political influenc=
e may have helped the sale, since Boeing handed a chunk of 7E7 manufactur=
ing work to Japanese companies.

Still, the 50-aircraft ANA order was a momentum-builder and Asian airline=
s are among the most eager 7E7 customers, Hazy said, citing Singaprore Ai=
rlines (SIAL), Air China, China Southern Airlines Co. (1055) and Emirates=
 Airlines as potential launch customers.

"I think there's increasing interest and I think the rest of this year we=
'll see a lot of (7E7) activity," Hazy said.

At the same event Boeing's top European salesman, Marlin Dailey, said he =
sees European customers accounting for 30 percent of total 7E7 sales.

But Boeing has had little luck pitching the aircraft to U.S. carriers, ma=
ny of which are still struggling in the aftermath of the Sept. 11, 2001, =
hijack attacks in the United States.

ILFC, a unit of American International Group Inc. (AIG), has not yet deci=
ded to place a 7E7 launch order, which typically gives a buyer greater sa=
y over aircraft configuration and options and a fat discount off the list=
 price, which is about $120 million for a 7E7.

"That's a corporate decision that we have not made yet," Hazy said, thoug=
h top Boeing commercial jet officials have paid him repeated visits.

Airbus has a reputation for offering airlines lower prices than Boeing, a=
nd Hazy expects the European manufacturer to employ that strategy in A330=
-7E7 competitions.

"Intially price is going to be an area where Airbus will try to compete,"=
 Hazy said, though Airbus could ultimately match many of the technologica=
l improvements on the newer 7E7.

Airbus last year pulled ahead of Boeing for the first time ever, deliveri=
ng more commercial jets. Many industry analysts considered the 7E7, due t=
o come to market in 2008, Boeing's last chance to keep pace with Airbus n=
ewer aircraft designs.

Airbus has launched the world's largest jetliner, the 555-seat A380, bank=
ing on increasing traffic between major cities.

ILFC was among the first to order the A380, despite some initial hesitati=
on, and Hazy sees that aircraft off to a good start as well. =



=A92004 Reuters Limited. =


Roger
EWROPS

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