Friday, November 22, 2013

Emirates Airline Urges Boeing to Build 777X in U.S.

Emirates Airline urged Boeing Co.   to build its 777X family of aircraft in the U.S., and rule out producing major parts in Europe or Japan, to avoid the kind of problems that beset the 787 Dreamliner program.

Tim Clark, president of Emirates, said Boeing should assemble the 777X family in its own facilities to better manage the process and deliver the aircraft on time in 2020. Emirates is the biggest customer for the 777X family of two long-range jets capable of handling about 350 to 400 passengers and costing about $350 million to $377 million at list prices.

The head of Boeing said Monday that the aerospace group will decide where to build its new 777X jetliner in "two to three months," evaluating potential alternatives to its Puget Sound base near Seattle after workers there rejected a new labor contract.

Qatar Airways Chief Executive Akbar Al Baker similarly expressed a desire that Boeing assemble the 777X at a single U.S. facility. "Frankly, we would rather everything was built in one place, and I think Boeing from the 787 experience have learned a lesson," he said in an interview Tuesday.

Jim McNerney, Boeing's chairman and chief executive, said Monday that Boeing would release "very specific plans" for building the long-range jet in two to three months. These would cover final assembly, building its wings and fuselage and certain fabrication work. "We have a number of alternatives," Mr. McNerney said at the air show. He didn't detail other possible production sites, though the company has staff evaluating a number in the U.S.

Mr. McNerney also said there were "no plans" to assemble jets outside the U.S., though he didn't rule it out in the future.

Emirates Airline this week placed a $76 billion order at the air show for 150 777X planes, helping make it the biggest jetliner launch in history. The airline, which is the world's largest international airline by capacity, said it had purchase rights for a further 50 777Xs, and would purchase 50 more Airbus A380 aircraft.

Emirates joined Etihad Airways and Qatar Airways on Sunday in purchasing the 777X, with those airlines taking orders for 25 and 50 versions of the aircraft, respectively.

The relationship between Boeing and the three biggest carriers in the Gulf has been growing closer in the past five years, as the airlines expand rapidly and heavily use the plane makers' widebody aircraft. The 777X family represents Boeing's first planes designed in significant part for the needs of the Gulf carriers.

Boeing said it had received 259 orders and commitments for the 777X planes, with Emirates, Etihad and Qatar accounting for 225 of those and the remaining 34 from Deutsche Lufthansa AG  . Of the total Airbus A380s currently on order, Emirates's own order makes up about half of those.

Mr. Clark added that the growing reliance of Boeing and Airbus on the carriers from the Persian Gulf was a function of other airlines currently sitting on their hands, as much as it was his own airline and Qatar Airways and Etihad being overactive. Other airlines "are all a bit risk-averse at the moment," said Mr. Clark. "They've had four years of hell in the business.

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