Airline doubles 787 order
Continental Airlines announced Tuesday it had placed orders for another 10 787s, doubling down on two previous deals.The Dreamliners were part of a 34-jet order for the Houston-based airline, which also ordered 24 737s.
Terms were not disclosed. The deal is worth about $3 billion at list prices, or perhaps $2.25 billion after what analysts say are typical discounts for 737s and 787s.
With Tuesday’s order, Continental now has plans to add 20 787s to its fleet, starting in 2009.
The airline’s goal is to use them to capture new overseas business, said Larry Kellner, Continental’s chairman and chief executive.
“These aircraft will give us the ability to seize long-haul market opportunities, remove less efficient aircraft from our fleet and maintain our role as a global network leader,” he said in a statement issued by the airline.
U.S. airlines are finding wider profit margins in overseas routes, Teal Group analyst Richard Aboulafia said. For most of the cash-strapped carriers, that means shifting older planes to fly the longer routes.
But Continental has the money to spend on new jets, Aboulafia said.
“Continental can seize market share this way,” he said. “If 787s give them a competitive advantage - why not?”
Continental will use the 787s to replace its older 767s on some routes, while also targeting new routes.
Kellner said Continental could use the additional 737s to expand its networks while also retiring older-model 737s.
The deal gives Boeing a net of 381 firm orders for the year so far. That’s a better-than-expected pace. Most industry watchers had expected sales to fall off this year, after both Airbus and Boeing set sales records in 2005.
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