A Japanese airline may launch first Boeing 7E7

SEATTLE — Boeing Co., which already plans to rely heavily on Japanese suppliers to build part of its proposed 7E7 jet, may also seek a Japanese airline to be its launch customer.

According to The Wall Street Journal, Boeing’s board of directors in September gave limited permission for Boeing to offer the proposed midsized, fuel-efficient jet for sale to All Nippon Airways and Japan Air Lines. The report noted that Boeing Commercial Airplanes President Alan Mulally flew to Tokyo to meet with top executives at the two carriers shortly after the board’s approval.

Boeing spokeswoman Yvonne Leach declined to comment on the report in Wednesday’s editions. She said the company is in talks with 50 airlines and that Boeing’s board is expected to decide whether to offer the 7E7 for sale to airline customers later this year.

The fact that Boeing may have relied more on U.S. carriers to serve as launch customers in the past doesn’t dictate the future, she said. "Everything on this airplane is being done differently," Leach said.

Launch customers are important for new model jets because not only do they commit to buying a certain number of planes, they also get involved at a deep level in the design of the new airplane. In addition, launch customers can help boost a jet’s cachet through their own reputation.

It would not be the first instance of Boeing using a non-U.S. carrier as the launch customer. The 737’s launch customer was German carrier Lufthansa, which added the first 737-100 to its fleet in 1968. And to be sure, there’s nothing to indicate that a U.S. airline won’t commit to the 7E7 jet in the near term either, analysts said.

But the reported pursuit of the two Japanese customers reflects how Boeing’s business — with 70 percent of its commercial jet deliveries going outside the United States — is increasingly hinging on the company’s success overseas.

Competitor Airbus has been gaining market share around the world, and this year is projected to deliver more jets than Boeing for the first time. And Asia is emerging as the next big battleground between the two airplane manufacturers, said Michel Merluzeau, principal analyst with Frost and Sullivan, a New York City consulting firm.

There are many reasons Boeing might pursue a Japanese airline as a launch customer, he said.

Both All Nippon and Japan Air Lines have been good customers for Boeing, Merluzeau said. In addition, he said, having one of those airlines as a launch customer could help Boeing as it tries to protect its turf in Japan and Asia.

Another reason is that U.S. carriers aren’t in great financial shape and would be hard-pressed to come up with the money to devote to new plane orders, said Richard Aboulafia, with aerospace consulting firm Teal Group.

"This is such a bad down cycle it’s going to be tough to jump start an up cycle," he said.

Boeing already has named three Japanese suppliers to its 7E7 team. The three are expected to build more than the approximately 20 percent of the airframe that they build for the 777.

Copyright ©2003 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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