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Japan Airlines to purchase Boeing's 7E7

/ Source: The Associated Press

Japan Airlines said Wednesday that it has selected Boeing Co.'s new 7E7 passenger jet to replace a fleet of older aircraft _ the latest development in the rivalry between the U.S. aircraft maker and Europe's Airbus to woo Asian carriers.

Japan Airlines said it will purchase 30 of Chicago-based Boeing's planned aircraft, called the 7E7 Dreamliner, with an option to order 20 more of both the long-range 7E7-8 and the short-to-medium-range 7E7-3.

JAL spokesman Tatsuo Yoshimura said the price of the deal was not disclosed, but said the catalog price for 30 7E7 jets is estimated at $4 billion. If all options are exercised, the total price would be about $6 billion, but airlines typically negotiate big discounts on major orders.

"This is just wonderful news from one of the world's premier airlines," Seattle, Washington-based Boeing Commercial Airlines spokesman Bob Saling told The Associated Press.

For the year, Boeing has a sales goal of 200 Dreamliners. JAL's announcement brings the number of officially announced orders for the Dreamliner aircraft to 112.

Saling said Boeing will announce more orders from other airlines by Dec. 31.

Boeing is pouring its efforts into the fuel-efficient 7E7. Its three models accommodate between 217 and 289 passengers. The Dreamliner is far smaller than its European rival's A380, a double-decker that seats more than 500 people.

The new JAL fleet is planned for 2008 and will be used on domestic and international routes, Tokyo-based JAL said. The 7E7 will replace JAL's medium size jet fleet, including 36 Boeing B767 jets, and 22 A300-600s from Airbus.

JAL said the 7E7 will have lower fuel consumption than its current fleet, and its newer-technology engines would be quieter and produce less exhaust emissions.

In Paris, Airbus SAS said Tuesday that Spanish airline Air Europa had become the first to commit to buying the A350, the jet Airbus is developing to rival the Dreamliner. Air Europa signed a memorandum of understanding to buy 10 A350s worth about US$2 billion at list price with options on two more.

In April, Japan's No. 2 carrier, All Nippon Airways Co., placed an order for 50 7E7 jetliners in a deal worth about $6 billion, making it the first carrier to purchase Boeing's next-generation aircraft.

Boeing is targeting Asia as a market for the 7E7 passenger jet and expects to finalize sales of about 200 7E7s by the end of this year.

Airbus, however, has recently won orders from India's budget carrier Air Deccan, Indian low-cost operator Kingfisher Airlines and Malaysian budget carrier AirAsia _ which said it would phase out its all-Boeing fleet.

Earlier this month, Airbus commercial director John Leahy said he hopes to have over 150 firm orders for the A380 by June 2005, up from the 129 Airbus has so far received from 11 airlines.

Japan's major heavy machinery makers, such as Ishikawajima-Harima Heavy Industries Co., Kawasaki Heavy Industries Ltd. and Mitsubishi Heavy Industries Ltd., are involved in the 7E7 Dreamliner project and are helping develop the aircraft, such as the major wing parts and engines.