Boeing, Japan Air in Dreamliner Deal

Japan Airlines could order as many as 50 of the aircraft maker's 7E7 Dreamliners.
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Updated from 9:20 a.m. EST

Boeing

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announced Wednesday that Japan Airlines could order as many as 50 of the aircraft maker's next-generation 7E7 Dreamliners.

In a press release, Boeing said Japan Airlines had placed firm orders for 30 of the fuel-efficient passenger jets, with options to acquire 20 more.

Deliveries will begin in 2008. The 7E7s will replace Japan Airlines' aging fleet of Boeing 767s and Airbus A300-600s. The airline has yet to choose between the 7E7's two engine options. Boeing is offering the

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Next Generation and the Trent 1000 made by U.K.-based Rolls-Royce.

The Japan Airlines order marks an important win for Boeing, which is locked in a worldwide battle for commercial jet market share with Europe's Airbus. Earlier this month, Airbus' shareholders gave the go ahead to sell new A350 jets modified from the company's A330 planes and designed to compete directly with the 7E7.

Boeing expects to begin 7E7 production in 2006, with deliveries set for 2008. The company says the Dreamliner will use 20% less fuel than current jets of comparable size. That is the main appeal to airlines, where fuel typically constitutes the second-largest expense after labor. Boeing is offering three Dreamliner versions. Targeted at the middle of the commercial jet market, they will seat between 200 and 300 passengers and make medium- to long-range flights.

Including the Japan Airlines order, Boeing has received 112 orders for the 7E7, 56 of which are under firm contract. The total falls short of Boeing's goal of 200 orders by year-end. Other 7E7 customers include Japan's Air Nippon Airways, Air New Zealand and Italy's Blue Panorama.

Boeing shares added 38 cents, or 0.7%, at $53.80.