An airline that started service six months ago with just one jet plans to buy 20 7E7s from the Boeing Co.
Primaris Airlines of Las Vegas also plans to buy 20 737-800s, the airline and company said Thursday. The deal is worth about $3.8 billion at list prices, but it’s likely that Primaris – the first U.S. airline to order the 7E7 – will receive a significant discount.
The deal has not been completed, but should be by year’s end, said Primaris spokesman Larry Walsh. “It’s just the normal lag in paperwork,” he said.
The airline has put cash down on the planes, he said. It’s also taking options on 25 more 737s and 15 more 7E7s.
The deal had at least one analyst scratching his head.
“I’d put this into the heading of high-risk,” said Richard Aboulafia, with the Teal Group in Virginia. Announcing this large an order from a previously unknown startup just emphasizes the lack of 7E7 orders from blue-chip airlines, he said.
“If you’re left with 200 orders from – how to put this gently – Airlines R Us, now you’re in trouble,” he said.
But aerospace analyst Paul Nisbet of JSA Research said it wasn’t surprising that the first U.S. order is coming from a discount carrier, given that so many of the major U.S. airlines are in such bad financial shape.
“The legacy airlines are certainly not anywhere near capable of paying for new aircraft – in fact, they’re shrinking their operations quite drastically – so it does leave you with the discount airlines as your only customers in the United States,” he said.
Primaris now operates just one plane, a chartered Boeing 757 that flies the White House press corps around the country. Walsh said executives – who include airline Chairman Jake Garn, a former U.S. senator and one-time astronaut – are still raising cash for the airline, which received its operating certificate from the Federal Aviation Administration in late 2003.
But Primaris has ambitious plans to offer both domestic and international service. The airline plans to start flying from New York to Los Angeles, San Francisco and Dallas in 2005, and to start trans-Atlantic flights in 2006, Walsh said.
The airline will focus on business travelers, flying routes between major cities, and the planes will be laid out in an all-business-class configuration, Walsh said. That will lower the seating capacity of the 7E7s – designed to carry 217 passengers – to about 150.
Yet, Primaris is positioning itself as a low-cost carrier – the first to order the 7E7.
Primaris will operate with leased planes until the jets in Thursday’s order are delivered. “There’s plenty of those available,” Walsh said.
Boeing 7E7 chief Mike Bair hailed the deal, saying that it “validates the 7E7 Dreamliner as a catalyst for new business models.”
“The 7E7 will be the airplane of choice for many types of carriers, including network carriers, low-cost carriers, and charter and leisure carriers,” Bair said.
So far, Boeing has firm orders for 52 7E7s -a 50-plane launch order from All Nippon Airways, plus two more from Air New Zealand. Two European holiday airlines, First Choice of the United Kingdom and Blue Panorama of Italy, have announced plans to take a total of 10 more.
Vietnam Airlines also has said it plans to take four 7E7s, although Boeing has not yet confirmed that.
Major airlines seem to be balking at ordering the 7E7 until Boeing completes negotiations with the key suppliers who will provide much of the airframe, Aboulafia said.
“I’m expecting that when the industrial agreements are in place, you’ll see some blue-chip orders,” he said. “I expect the quality and quantity will improve on the order book.”
Last week, Boeing’s three Japanese partners – Fuji, Kawasaki and Mitsubishi heavy industries – announced that they had come to terms with Boeing on their shares of the 7E7 work.
Talks continue with Alenia of Italy and Dallas-based Vought, Boeing’s two other 7E7 partners, spokeswoman Yvonne Leach said.
Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.
Primaris Airlines
Headquarters: Las Vegas
Established: 2003
Current fleet: One Boeing 757 chartered to fly the White House press corps.
Business plan: Target business travelers with a lower-cost, business-class-only service. Begin flying to Dallas, Los Angeles and San Francisco from a New York base in 2005. Expand to international service in 2006.
Thursday’s order: 20 737-800s for delivery 2007-2010; 20 7E7-8s for delivery 2010-2013; options on 20 more 737s and 15 more 7E7s. List price value: $3.8 billion.
Herald staff
Primaris Airlines
Headquarters: Las Vegas
Established: 2003
Current fleet: One Boeing 757 chartered to fly the White House press corps.
Business plan: Target business travelers with a lower-cost, business-class-only service. Begin flying to Dallas, Los Angeles and San Francisco from a New York base in 2005. Expand to international service in 2006.
Thursday’s order: 20 737-800s for delivery 2007-2010; 20 7E7s for delivery 2010-2013; options on 25 more 737s and 15 more 7E7s. List price value: $3.8 billion.
Herald staff
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