Boeing cuts prices for low-cost airlines

The three main sections of the first Boeing 777-200LR, which will be the world's longest-range commercial jetliner, was recently joined in Everett, Washington. The first delivery, scheduled for early 2006, will go to Pakistan International Airlines and EVA Air. The plane will be able to travel from London to Sydney and New York to Singapore with 301 passengers, without having to refuel. Boeing also plans to also market its new 7E7 Dreamliner in Asia. PHOTO: EPA

US aerospace giant Boeing Co said yesterday it would aim to offer cheaper planes to low-cost airlines after losing a lucrative 40-jet contract with Malaysia's AirAsia to European rival Airbus.

AirAsia announced on Thursday it would buy 40 A320 jets for US$2.5 billion from Airbus even though its current fleet of 26 aircraft was made up of Boeing 737s.

"We are very disappointed that Airbus was able to get the AirAsia deal," Boeing Commercial Airplanes' marketing vice president, Randy Baseler, told reporters in Asia via a conference call from the US.

Baseler said Boeing had not been able to clinch the deal mainly because Airbus had undercut them.

"Airbus has been very aggressive on price ... they have reduced their price significantly. You have probably seen it reported that AirAsia was offered airplanes for under 30 million dollars and these are 60 million dollar airplanes on catalogue price so that's a big discount," he said.

"We will continue to bring the cost down so we can continue to be competitive and not let the market share slide," he said.

Baseler said that, despite the AirAsia deal, 88 percent of the 1,100 airplanes being run by low-cost carriers globally were 737s.

"The 737 is still dominant for big low-cost carriers," he said.

Boeing plans to target Asia as a market for its new 7E7 Dreamliner passenger jet and expects to finalize sales of about 200 7E7s by the end of this year, Baseler said.

He said Boeing has made proposals to about 30 airlines to sell more than 600 7E7 Dreamliners, which are expected to start service in 2008.

Boeing is finalizing sales of 200 7E7s to Asian, Middle Eastern, European and North American carriers, he said in a teleconference with Asian journalists.

"We have been talking to our regular customers in the Asia region, such as All Nippon Airways of Japan," Baseler said.

Boeing, which lost out to Europe's Airbus SAS in jetliner deliveries for the first time last year, is seeking success with the 7E7 after Airbus announced last week that it will launch its A350 to rival Boeing's new aircraft.