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. Last Updated: 07/27/2016

'Satisfied' Boeing Makes Cargo Sales




TAIPEI, Taiwan -- Beaten out by rival Airbus Industrie in a major sale of passenger jets to Taiwan's China Airlines, the Boeing Co. on Wednesday signed a $2.5 billion order to supply the airline with 13 747-400 cargo jets.


Boeing's Asia president, Fred Howard, called the deal Boeing's largest-ever order for the freighters. The package includes options for four more cargo planes and two 747-400 passenger models worth an additional $1 billion.


But in a year of nose-diving orders, Boeing failed in its bid to sell China Airlines a dozen Boeing 777 jets, worth $1.5 billion.


Airbus, the European airplane maker, is set to sign contracts Thursday with China Airlines for seven A340 jetliners worth about $2 billion, with an option to buy four A330s and another A340.


Howard said Seattle-based Boeing was disappointed at losing the passenger jet deal, which took on political overtones this month with accusations originating in Boeing's home state that Taiwan was snubbing Boeing to retaliate against U.S. government policies seen as unfavorable to the island.


"We are very, very satisfied to be able to deliver 13 747s plus options to China Airlines over the next few years,'' Howard said. "Of course, we would have liked to have gotten the other portion, but we respect their decision and will continue to work with our good friends and partners.''


China Airlines also decided to exercise options for five Boeing 737-500 passenger planes, worth about another $150 million.


Loss of the passenger jet order comes amid a forecast fall of up to 40 percent in total Boeing orders for 1999 against 1998 due to the weakened global economy and the signing of numerous large orders earlier, Howard said.


China Airlines said the purchase was the culmination of a fleet expansion and simplification plan that will reduce the planes it flies to just three types by 2007, boosting the airline's bottom line and improving safety.


Airline president Sandy Liu said the passenger jet deal with Airbus had been based on the results of a painstaking technical evaluation and denied any government intervention.


"We are a private company. It's not correct to say that there was any government intervention whatsoever,'' Liu said.


China Airlines signed a letter of intent four years ago to buy the Boeing 777 passenger jets, but Airbus eventually offered a better package of price and after-sales service, although the specifics of the deal remain secret, Liu said.