Qantas to Buy Up to 115 Boeing Dreamliners

Australia's flagship carrier Qantas said Wednesday it could order up to 115 new Boeing Co. (BA) Dreamliners in a deal that may net Boeing at least $14.4 billion and help it land a heavy blow in its battle with rival Airbus.

Qantas said it has placed firm orders for 65 new Boeing 787 passenger jets and has secured rights to buy another 50 of the so-called Dreamliners to cope with future growth.

In a statement, Chicago-based Boeing said the aviation company and Qantas were finalizing an agreement that will include orders for 45 Dreamliners, with 20 options plus purchase rights for an additional 50 airplanes as Qantas moves to renew its fleet.

Boeing lists the price for the 787 on its Web site as $125 million to $135 million, but airlines frequently negotiate discounts.

The deal means that Boeing pulls far ahead in its quest this year to sell more aircraft than its archrival Airbus, which also had been lobbying Qantas to buy its planes. As of the end of November, Boeing had won 800 orders — not including the Qantas order — more than any year in nearly two decades, and more than the previous three years combined. Airbus sold 687 planes during the same period — up from 370 in 2004.

Boeing shares rose 71 cents, or 1 percent, to $71.30 in pre-market trading.

Boeing said the deal with Qantas was an important development with a key customer for the aviation company.

"They are obviously one of the premier airlines in the world and obviously have been a very good customer for Boeing and have operated a number of our aircraft," Boeing spokesman Peter Conte in Seattle said.

"This is a very, very big commitment by Qantas to growth," Qantas Airways Ltd. Chief Executive Geoff Dixon told reporters.

Airbus spokesman David Voskuhl expressed disappointment with the Qantas decision but said the "flagship of their fleet" would be the A380 superjumbo.

"We respect the airline's decision," Voskuhl said. "We would certainly have liked to win, but they have decided in favor of the 787 and we would certainly not criticize that."

The Airbus A350, a planned long-range competitor to the Dreamliner, is set to enter service in 2010, two years after the Boeing plane. Neither Qantas nor the rival aircraft makers indicated whether delivery schedules were an important factor in the decision.

The new plane orders announced Wednesday come on top of a multibillion dollar deal to buy 12 new Airbus A380 superjumbo planes — the world's largest passenger jet. Qantas will begin taking delivery of the A380s early in 2007.

Qantas chairwoman Margaret Jackson said the airline would fund the Boeing 787 purchases from the company's operating cash flow.

"This fleet plan will give us a modern fleet offering maximum flexibility, lower seat mile costs and greater fuel efficiency," Jackson said in a statement.

Investors approved of the announcement, sending Qantas stock soaring 3.2 percent to close at $3.87 Australian dollar ($2.91).

The announcement signals that Qantas will not begin flying nonstop between Sydney and destinations like London. The company had talked to both Boeing and Airbus about buying planes capable of making the flight without a refueling stop.

Qantas said it had sought tenders from Airbus and Boeing for ultra-long range variants of the Airbus A340 and Boeing 777 as part of its current fleet renewal plan.

"However, neither the B777 nor the A340 provide an economical solution to our desire to have some of our services overfly midpoint hubs," Dixon said.

"We will continue to talk to Airbus and Boeing on further developing the options for longer-range aircraft," he added.

Last week, Qantas announced its domestic budget carrier, Jetstar, would begin international flights by early 2007.

The company said Wednesday some of the newly ordered 787s would go to the Jetstar fleet and others to Qantas. Initially, Jetstar will fly four A330-200 planes internationally until it takes delivery of new 787s.

Dixon said the new carrier later would expand to fly to Europe and other regions around the world.

According to its Web site, Qantas currently operates a fleet of 201 aircraft, comprising Boeing 747s, 767s, 737s and 717s, Airbus A330s and A320s, Bombardier Dash 8s and British Aerospace 146s.

The company flew 32.7 million passengers in the year to June 30, 9.4 million of them on international routes.