Daily Management Review

$6.7 Billion Qatar Air Deal for 787, 777 Nearing, Said Boeing


09/30/2016




$6.7 Billion Qatar Air Deal for 787, 777 Nearing, Said Boeing
Following U.S. approval of a long-stalled sale of F-15 fighter jets to the Persian Gulf nation, Boeing Co. is nearing an agreement with Qatar’s flagship airline for a multibillion-dollar commercial jet order.
 
People, who asked not to be identified because the talks are private, reportedly told the media that Qatar Airways would take 787 Dreamliner and 777 models and is in late-stage talks to acquire at least 30 Boeing wide-body jets. Although airlines typically negotiate discounts, the order would be valued at upwards of $6.7 billion at catalog prices.

Adding to its backlog of orders for Boeing and Airbus Group SE planes, the carrier was poised to make a “large” aircraft purchase, Akbar Al Baker, chief executive officer of government-owned Qatar Airways, told reporters in late August. Reports suggested that the U.S. approved fighter-jet sales to Persian Gulf allies including Qatar.
 
Boeing declined to comment on the discussions, as did a spokeswoman for Doha-based Qatar Airways.
 
Chicago-based Boeing, the world’s largest commercial aircraft manufacturer and second-largest defense contractor, would be given a boost by the two deals. As U.S. orders wane, the company’s St. Louis assembly lines could be kept busy through the early 2020s by the fighter-jet sale. Howard Rubel, an analyst at Jefferies, said in a note to clients that the transaction could be valued at more than $7 billion for Boeing.
 
As a glut of second-hand 777 and Airbus A330 models curbed demand and the sold-out 787 was unavailable in the near term, Boeing and Airbus have struggled to land sales of twin-aisle jetliners this year. As traffic has lagged behind projections, leading to overcapacity that drags down air fares, airlines in many parts of the world have reined in expansion plans.
 
“From a producer standpoint, it’s badly needed,” Richard Aboulafia, an aerospace analyst at Teal Group, said by phone. Referring to Qatar’s bulging order backlog that includes an agreement to take Airbus A350 widebodies, he said: “From a customer’s, it doesn’t make sense unless it comes at the expense of another order.”
  
A little more visibility into its plans for the 777, Boeing’s largest twin-engine plane, as well as the Dreamliner, the company’s marquee carbon-fiber jet as the Qatar Airways purchase would be Boeing’s largest twin-aisle sale this year if it is completed.
 
Whether a dearth of orders will force it to again slow the assembly of the current-generation 777 models until an upgraded version of the plane debuts in 2020 or whether the planemaker boosts 787 output could be determined by the sales campaigns underway, Bottom of Form
Boeing CEO Dennis Muilenburg said earlier this month.
 
“Obviously, pressure there, a number of campaigns under way. We need to be successful on some of those campaigns over the next two months to three months to hold that seven-a-month rate structure,” Muilenburg told a Morgan Stanley conference.
 
The options it held to purchase 30 Dreamliners, a move that would double its Boeing 787 fleet, were intended to be exercised by Qatar Airways, Al Baker had said repeatedly. According to the planemaker’s website, the carrier also holds orders for another six Boeing 777 and 60 of the upgraded 777X as the airline has global ambitions to match those of Dubai-based Emirates and Abu Dhabi-based Etihad.
 
(Source:www.bloomberg.com) 






Science & Technology

Chinese Study Claims Heart Diseases Can Be Reduced By Having An Egg A Day

Asteroid mining: Reality or fiction?

3D Printing Used For Life Saving Kidney Transplant In Two Year Old At U.K. NHS

California to require solar panels for new homes by 2020

Blockchain Enables De Beers To Track Diamond From The Miner To The Retailer

Microsoft releases Windows 10’s April 2018 Update

DNA Sequencing Project Proposed For All Complex Life Forms On Earth By An Int’l Team

Facebook may start production of its own microprocessors

Long-Term Alcohol Monitoring Could Be Possible With A New Injectable Chip Developed By U.S. Researchers

Sweden Now Has The First Electrified Road In The World

World Politics

World & Politics

The British government is trying to unblock money to pay off the national debt

Ministerial Visit From India To North Korea Aimed At Strengthening Ties

What countries are the biggest losers of Trump’s Iran decision?

World's Oldest Elected Prime Minister Is Malaysia’s 92 Year Old Mahathir Mohamad

Why Is U.S. Pulling Out Of The Iran Deal A Big Deal For The World

Merkel, Macron, May call on Iran to adhere to the nuclear deal

Arab Region Driven In ‘Wrong Direction’ In Last 10 Years, Say Arab Your: Survey

German doctors demand a tax on sugar