And this just in from Iceland …

… former Herald reporter Susanna Ray, now with Bloomberg News, reports from Frankfurt, Germany, on Icelandair’s plans to get into the jet leasing business. It’s not a huge order for Boeing, but it’s a big deal in Reykjavik — an airline with 12 planes in its fleet has ordered 10 new planes.

Read for yourself:

Boeing Wins Icelandair Leasing Unit’s 10-Plane Order

By Susanna Ray

Jan. 26 (Bloomberg) — Boeing Co., the world’s second-biggest

planemaker, received an order for 10 737-800 airliners from

Icelandair Hf, worth about $650 million at list prices, as

Iceland’s biggest carrier sets up a plane-leasing business.

The contract for the 162- to 189-seat medium-range airliner

also includes options for five more 737-800s, Chicago-based Boeing

said today in an e-mailed statement.

The planes, which were bought at “a very favorable price”

in Icelandair’s biggest-ever order, will be delivered starting in

2006 and provided to Chinese airlines, the Reykjavik-based carrier

said in a separate release on its Web site.

Boeing earlier this month beat larger competitor Airbus SAS

with a 10-plane 737-800 order from TUI AG’s Hapag-Lloyd Flug

airline unit. Toulouse, France-based Airbus, which overtook Boeing

in plane deliveries in 2003, in November won a 70-plane, 40-option

order worth as much as $6.6 billion for its competing A320 model

from Air Berlin GmbH, Europe’s third-biggest low-cost airline.

Icelandair’s nine-month net income rose 56 percent to 2.68

billion kronur ($43 million), and sales rose 14 percent to 34

billion kronur, as the airline added flights and cut fares to

attract passengers.

Chairman Hannes Smarason said in November the company may

increase its 10.1 percent stake in EasyJet Plc, Europe’s second-

biggest discount airline, to grow outside Iceland.

Icelandair said Jan. 12 that it had bought three used Boeing

737-500s from Ireland’s state-owned Aer Lingus to lease to Air

Baltic in Latvia as it formed a 49 percent-owned plane-leasing

venture. The company didn’t identify the business’s other owners.

The airline expects to sign leasing accords this year through

the Sunrock subsidiary of Sojitz Corp. a Japanese trading company,

Icelandair said today.

The Icelandic carrier has an all-Boeing fleet of 12 aircraft,

according to its Web site. The average age of the 10 airplanes

used in international passenger operations is 6.4 years.

Icelandair, which flies to 20 destinations in 10 countries in

Europe and North America, carried 1.3 million passengers last

year, an 18 percent increase from 2003.

The company raised 3.8 billion kronur in a share sale Nov. 10

and had about 10 billion kronur in cash and equivalents on hand at

the end of Sept. 30.

Shares of Icelandair rose as much as 8.3 percent and were up

0.55 krona, or 4.6 percent, at 12.65 kronur at 3:55 p.m. in

Reykjavik, valuing the company at 32.1 billion kronur. Boeing

shares in New York were up 5 cents, or 0.1 percent, at $49.89

after rising as much as 1 percent.

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