Boeing secures Air China orders for 747-8 aircraft
Updated: 2013-03-04 07:51
By Bloomberg News in New York (China Daily)
Air China Ltd, the nation's biggest carrier by market value, agreed to buy two Boeing Co 747-8 aircraft in the airplane maker's first sale of the models this year.
Air China will also purchase one wide-body 777-300 plane, 20 single-aisle 737-800 jets and eight 777 freighters, according to a statement over the weekend. The planes have a combined catalog value of $4.8 billion. Boeing granted "significant price concessions" through credit agreements, the airline said in the statement.
Boeing, based in Chicago, hasn't sold more than five 747-8 aircraft a year since Deutsche Lufthansa AG purchased 19 of the planes in 2006, and concern that persistently weak demand could prompt the company to curtail production has been mounting.
Friday's orders may help alleviate some of the pressure, according to Stephen Levenson of Stifel Financial Corp.
"There has been concern that the dearth of orders could mean whitetails on the tarmac or insufficient demand to keep build rates at the current two per month," the New York-based analyst wrote in a note to clients on Friday.
Boeing "has been making a major effort to book more 747-8 orders particularly from carriers in the Asia-Pacific territory that may be best-suited to their use."
That helps to balance the production schedule and backlog, said Levenson, who recommends buying the shares.