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'08 Olympics push China toward major 7E7 order

By David Bowermaster
Seattle Times aerospace reporter

Larry Dickenson

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Talks with the Chinese carriers have taken on new urgency since the All Nippon order, Larry Dickenson said, as they are anxious to ensure they'll have 7E7s ahead of the 2008 Beijing Olympics.

"China has this huge event in 2008, and they absolutely want their airlines operating the most technologically advanced airplanes at that time," said Dickenson, senior vice president of sales.

The Games open Aug. 8, 2008. Boeing will begin delivering 7E7s sometime in 2008, but it is not clear how many planes the company will churn out during the first months of production.

Dickenson is putting that uncertainty to use as a sales tactic to persuade wavering 7E7 customers in China and elsewhere to close deals.

"Clearly we would like anybody that needs airplanes to have them in that time frame," Dickenson said, "But time is moving on."

China Southern Airlines, Air China, Shanghai Airlines, China Eastern, Hainan Airlines and Xiamen Airlines received formal 7E7 proposals from Boeing a month ago, Dickenson said.

The carriers are state-owned, so the Chinese government would decide how many planes would go to each airline, and in what order.

In the past China has used large Boeing orders to send political signals to the U.S., completing deals when relations were good and withholding them when times were tense.

China also tends to complete orders at high-profile events, such as summits between high-ranking government officials.

"We're trying to have this not follow the normal approval process," Dickenson said, noting he'd like to have a deal completed by summer.
 
He will make his next trip to Beijing in June.

Dickenson and Boeing Commercial Airplanes chief Alan Mulally visited all six carriers during a trip to China in late March, and each of the airlines' chief executives attended a 7E7 summit Boeing convened in Hong Kong on Feb. 19.

Nevertheless, "it's hard to handicap at this juncture" which of the six carriers might get 7E7s first, Dickenson said.

Various factors favor different airlines. China Southern is the country's largest airline; Air China is the country's flagship carrier and is based in Beijing; Shanghai Airlines recently began flights to Europe; and Hainan and Xiamen are China's fastest-growing airlines.

If China dithers, Dickenson said other international airlines that serve Beijing would like to transport their Olympic athletes and spectators to the Games aboard 7E7s.

Dickenson traveled to Seoul last week after completing the All Nippon order to discuss the 7E7 with Korean Air.

Singapore Airlines is reviewing a 7E7 sales proposal, Dickenson confirmed, and Vietnam Airlines has expressed interest in the widebody jet as well.

Interest also exists outside of Asia.

Qatar Foreign Minister Hamad bin Jassim met Sunday with Mulally and Toby Bright, Boeing's executive vice president of sales, and toured the company's Everett plant.

Much of the discussion focused on the 7E7 and its possible uses for state-owned Qatar Airways.

Hamad said a decision about possible orders would probably be made by the end of the year.

The 7E7-3 will carry 217 passengers in a three-class configuration up to 3,500 nautical miles, while the 7E7-8 will ferry a similar number of travelers up to 8,300 nautical miles. Boeing has promised the plane will burn 20 percent less fuel than today's comparable widebody jets, such as the Airbus A330-200.

All Nippon will receive both 7E7-3s and 7E7-8s, but the exact mix has not been decided.

Boeing also has plans for a stretch version, the 7E7-9, that will carry 250 passengers in three classes. It has not set a timetable for launching that plane.

Glancing at a 7E7 model painted in All Nippon colors on his coffee table, Dickenson expressed deep satisfaction at the work his sales team did to close the All Nippon transaction, which is the largest ever to launch a Boeing plane.

All Nippon was a natural sales target, Dickenson said. Outside the U.S., it is the largest operator of Boeing 767s, which the 7E7 is expected to replace.

Yet negotiations still took more than a year, escalating in intensity in early 2004. Joe McAleer was the sales director leading day-to-day discussions with All Nippon, with Dickenson visiting every month or two.

Negotiations went down to the wire, Dickenson said, but ultimately All Nippon wanted the prestige and perks that go with being any model's first buyer.

Boeing expects four or five more airlines to fill out a 7E7 launch group that will receive discount pricing, early delivery slots and input on the plane's final configuration.

But, like the seasoned salesman he is, Dickenson made it clear the clock is ticking.

"If you want to be in the launch group," he added later, "you've got to move out."

Information from Reuters is contained in this report. David Bowermaster: 206-464-2724 or dbowermaster@seattletimes.com