Boeing scores big in airplane order shuffle

Associated Press

SEATTLE — The Boeing Co. scored a hat trick of sorts in its commercial airplane division, with Virgin Airlines spurning rival Airbus Industrie’s proposed A3XX in favor of five 747-400s that had been ordered but later dropped by another airline, Italy’s Alitalia.

Alitalia, while dropping the 747s on Tuesday, ordered six Boeing 777-200ERs with options for six more of the extended-range twinjets. Thus, Boeing gets to sell the 747s already being built, worth $800 million, gets an order for 777s worth up to $960 million, and has the satisfaction of seeing its chief rival get nothing despite having the newest aircraft design on the market.

On Wednesday, Virgin Atlantic agreed to buy the 747s to accommodate its current expansion needs. The British carrier has said it plans to buy the new double-decker A3XX, but has not yet placed firm orders for it.

Both the 747 and 777 are assembled in Everett.

Orders for the 747-400 have been slow this year, with just 11 so far. While Boeing expects more 747s to be sold, especially freighters, more attention has been focused on the 550-seat A3XX, a $12 billion program launched by Airbus to compete with Boeing in the jumbo jet market.

In response, Boeing plans to build and market a "stretch" version of its 416-seat 747-400, adding 100 seats while still keeping the basic design intact. That program is expected to cost Boeing $4 billion to $6 billion in development costs, but will launch far earlier than the 2006 delivery date for the A3XX.

Both the 747 and A3XX face competition from the 300- to 400-seat Boeing 777, a long-range, twin-engine aircraft that many airlines are choosing over the larger jets.