Boeing reportedly near key Northwest deal for 787 jet
Northwest said to be interested in Dreamliner jet
By August Cole, MarketWatch
Last Update: 2:49 PM ET Apr 12, 2005
SAN FRANCISCO (MarketWatch) -- Boeing Co. is reportedly close to clinching a big aircraft order from Northwest Airlines in a deal widely seen as a domestic vote of confidence in the aerospace company's next new plane, the 787 Dreamliner.
Commitments from U.S. airlines for the 787 have been scarce to date for Boeing (BA: news) . The airline industry's financial condition is so precarious that fuel bills alone this year threaten a recovery.
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Standing out, Continental Airlines (CAL: news) is in line to buy the as-yet unbuilt 787, but even its order was recently jeopardized by the carrier's contentious labor talks that threatened to scuttle the deal.
Now, The Wall Street Journal is reporting that Northwest (NWAC: news) is close to a $2.1 billion deal to buy up to 18 of the 787s, including a firm order for 10 to 12 of the jets. See Wall Street Journal story.
A Boeing spokesman said the company doesn't discuss ongoing negotiations with airlines. A Northwest spokesman said that the company continues to talk with different manufacturers.
Shares of Boeing, a Dow Jones Industrial Average component, traded at $58.51, down 89 cents, or 1.5%, in afternoon action.
For Chicago-based Boeing, lining up another big U.S. airline to fly its all-new plane would be a big boost at a time when nearly all of the 17 airlines that have ordered the plane are based overseas. The only other U.S. passenger carrier aside from Continental that has ordered the 787 is upstart Primaris Airlines.
For Northwest's part, the carrier has no firm orders for Boeing jets but is a big Airbus customer, with A319, A320, A330 models on the way.
"Northwest is a significant Airbus A330 operator, and we would regard a win here as a clear positive for Boeing," wrote Banc of America Securities analyst Nick Fothergill in a Tuesday research note.
Airbus is working on a competitor to Boeing's 787, which is designed to be cheaper for airlines to operate. The Airbus A350 is a derivative of the A330. Like the 787, it will rely on composite technology.
Among Boeing's chief selling points for its new jet: it will burn less fuel thanks to more efficient engines and to lightweight composite structures never before used before on commercial jets.
For travelers, both manufacturers are trying to improve the in-flight experience with roomier cabin space, better seats and improved ventilation.
The dogfight between Boeing and Airbus will only continue to heat up this spring, and into the summer.
Airbus is working on its mammoth A380 in time for the Paris Air Show in June. Boeing, still without a flying prototype of the 787, will display other equipment at the event.
Even if the jets won't dot the skies for years, every sale helps the company regain ground lost to rival Airbus. The Toulouse-based jetmaker now beats Boeing in the number of orders and deliveries, a historic turn of the aerospace tables.
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