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Boeing gets record $18-billion jetliner order

Emirates airline orders 50 twin-aisle Boeing 777 jetliners with an option for 20 more. Boeing also sells six Boeing Dreamliners to Oman Air, a deal worth more than $1 billion.

November 14, 2011|By Gregory Karp

Reporting from Chicago — It's rarely news when a company gets an order for 50 units of its product. But it's a big deal when the company is airplane-maker Boeing Co. and the list price for those 50 airplanes totals a record $18 billion.

Just as big is where Boeing got the order: the Middle East, a growing gold mine of future airplane orders. In a forecast released Monday, the Chicago company estimates that airlines in the Middle East over the next 20 years will need 2,520 airplanes worth $450 billion.

Boeing over the weekend announced its biggest-ever order by dollar value for commercial airplanes — 50 twin-aisle Boeing 777 jets. The blockbuster order came from Emirates airline in Dubai. The airline also has an option to buy 20 more planes, which would push the total list price to $26 billion, Boeing announced at the 2011 Dubai Air Show.

Then on Monday, Boeing said Oman Air ordered six Boeing 787-8s, the so-called Dreamliner, which boasts dramatically better fuel economy and passenger amenities. List price for six of those is more than $1 billion.

"This is clearly a huge positive for Boeing," Morningstar analyst Neal Dihora said. "The quality of these particular customers is pretty strong."

Many Middle East airlines are owned by their oil-producing nations. So, not only do they have the money to pay for planes, but a surge in fuel prices — usually damaging to airlines because it's one of their biggest costs — is not as detrimental because the country is making money on the higher price of oil. That's important because they will be less likely than other airlines to cancel or delay airplane orders when fuel prices rise, Dihora said.

"They have a natural hedge," he said.

The Emirates order solidifies Boeing's lead in the market for wide-body planes and helps hold at bay competitor Airbus SAS' attempt to encroach on its dominance with the A350 airliner.

Boeing's win at the air show comes four months after Airbus said it would push back the debut of the largest A350, which competes directly with the 777-300ER. It delayed the debut to add more thrust after customers demanded more payload and range.

Boeing Co shares rose 1.5% to $67.94.

gkarp@tribune.com

Bloomberg News contributed to this report.

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