Still no decision on CAL jet order

China Airlines Co (華航), Taiwan's largest carrier, said it's still in talks on a possible aircraft order from Boeing Co and Airbus SAS and reiterated it plans to finish the negotiations this year, a company official said.

The airline was responding to a report in the Asian Wall Street Journal that it will spend more than US$4 billion to buy as many as 10 Boeing 747 jetliners and 12 Airbus A330 aircraft to modernize its fleet. The paper didn't cite anyone.

The carrier "has not finalized its negotiations with both Boeing and Airbus," said China Airlines spokesman Roger Han (韓梁中). "We are scheduled to complete our talks by the end of the year and our decision is likely to include firm orders as well as options."

Any new orders will help Boeing meet its delivery target of 300 planes in 2003. Boeing and rival Airbus are struggling to sell commercial planes as falling travel demand and rising insurance costs after last year's terrorist attacks trigger losses for many airlines.

The price for any order would probably be substantially lower than the US$4 billion total quoted by the paper, Han said.

"Airlines normally can expect a 30 percent to 50 percent discount on Boeing's and Airbus's listed price, especially during an economic slowdown," said Han.

Boeing 747-400s costs as much as US$211 million, while an Airbus A330-200 may fetch US$132 million, according to the companies' list prices.

Boeing and Airbus officials declined to say whether they have reached an order agreement with China Airlines.

"We've been having discussions for quite a few months," said Boeing spokesman Mark Hooper in Hong Kong, adding that the talks include 747s.

China Airlines, about 71 percent owned by a state aviation foundation, said in June it would order new aircraft in the second half of this year to update its fleet, replacing aging Airbus A300-600Rs.

Japan Airlines Co, which will merge with Japan Air System Co. on Wednesday, said last week it will buy two 747-400 freighters. It will also change an earlier order for five 777-200 planes to two 777-200s and three larger 777-300s. All Nippon Airways Co, Asia's second-largest carrier, in July said it would spend ?170 billion (US$1.4 billion) to buy 14 Boeing jetliners.

China Airlines has had five fatal crashes in the past 11 years. The most recent was in May, when a 747-200 plane broke up in flight killing all 225 people on board.