Etihad, Southwest, FedEx Spread Holiday Cheer to Boeing
The holiday season seemed to start early last week for Boeing, as it secured no fewer than three major firm orders, including the biggest in its history.
First, Boeing watched the sales total for its 787 Dreamliner once gain rise above the 800-unit level when, on December 12, Abu Dhabi’s Etihad Airways placed a $2.8 billion firm order for ten 787-9s and a pair of 777 Freighters. The deal makes Etihad Boeing’s largest airline customer for the 787-9 and raises the number of Dreamliners on which it now holds firm orders to 41. Meanwhile, the order for the pair of Freighters raised Etihad’s 777 backlog to 12 airplanes.
A day later, Southwest Airlines managed to make the Etihad deal seem modest, when it announced it placed a launch order for 150 of the new 737 MAX and 58 Next Generation 737s.
Worth nearly $19 billion at list prices, the order ranks as Boeing’s single largest ever, both in terms of dollar value and number of airplanes. As the official 737 MAX launch customer, Southwest expects to take the first of its CFM Leap-1B-powered narrowbodies in 2017.
The new orders augment Southwest’s existing firm order book of 142, raising the number of Boeing airplanes on which it holds firm orders to 350. Delivery schedules call for Southwest to receive all the airplanes over the next 10 years. According to Southwest executive v-p and COO Mike Van de Ven, the company has projected its annual capital expenditures on the airplanes to average $1.2 billion during that time frame.
The firm orders for 58 new 737NGs include the conversion of previously reserved options on 25 airplanes. Southwest has substituted 737-800s for all 737-700NG deliveries scheduled for 2012 and 2013 as well some of the airplanes due for delivery in 2014. For the 737 MAX order, Southwest reserves the option to accept MAX 7 or MAX 8 deliveries.
The 737 MAX has now attracted firm orders and “commitments” for 948 airplanes from 13 customers, according to Boeing Commercial Airplanes CEO Jim Albaugh.
Finally, on December 15, Boeing announced that FedEx Express ordered twenty-seven 767-300 Freighters to replace its MD-10s and exercised options on two more 777 Freighters. The deal makes FedEx a new customer for the 767 Freighter and ensures the type’s production “for years to come,” according to Boeing Commercial Airplanes v-p of marketing Randy Tinseth. Schedules call for delivery of three of the jets in FedEx’s 2014 fiscal year, followed by six a year from FY 2015 to 2018.
Meanwhile, its conversion of options on the pair of 777s raised Boeing’s net order total for the widebodies to 200 this year. However, FedEx also delayed delivery of eleven 777s already on order for a still undisclosed period “to better balance air network capacity with demand.”