Continental fills up with Boeing

Continental Airlines said Tuesday it has ordered 34 new planes from Boeing, with a list price of $3.2 billion, to increase its ability to serve long-haul routes and remove gas guzzlers from its fleet.

Houston-based Continental said it wants 10 more 787s, doubling its previous orders. That would make it the largest U.S. buyer of Boeing's latest wide-body, which is scheduled to go into service in 2008, a Boeing spokesman said.

The airline also ordered 24 more Boeing 737s and will have 213 "next-generation" 737s when all the planes it has ordered are delivered.

Continental, the fourth-largest U.S. airline, didn't disclose how much it will pay for the 34 planes. Discounts of as much as 30 percent are typically given for large orders.

Boeing expects all the Continental orders to be firmed up this week. That would boost the running total of 787 firm orders to 363.

Most of those orders have come from Asian and European airlines, but Continental's 787 order "could light a fire under the other U.S. carriers if they want to maintain any competitive position," said Mary Anne Sudol, an analyst at Caris & Co. in New York.

"Fuel efficiency can give you a big edge, and Boeing is peddling that in a big way with the 787," Sudol said.

The aircraft is about 20 percent more fuel efficient than the Boeing 767 it will replace.

Continental has been ordering more fuel-efficient aircraft for the past several years, believing this would give it an advantage over rivals.

Its 356 jets at the end of 2005 had an average age of 6.6 years.

The company has also taken steps such as adding upturned winglets, which boost mileage, and improving operating procedures to save fuel.

Since 1998, Continental has improved fuel efficiency nearly 25 percent for each seat flown a mile. The average price of a gallon of jet fuel has more than quadrupled during that time, to $1.96 from 46 cents.

Continental said it will use the 787s to replace 10 less fuel-efficient and smaller 767-200 jets on international routes. It plans to increase global capacity 9.1 percent this year, including increases of 16 and 13 percent across the Atlantic and to Latin America, respectively.

Continental lost $68 million last year, narrowing sharply from a $409 million loss in 2004.

Its shares rose 57 percent last year and early last month hit $30.12, their highest level since 2002.

The stock closed Tuesday at $23.62, down 38 cents.

Information from The Associated Press, Bloomberg News and Seattle Times aerospace reporter Dominic Gates is included in this report.

787 supplier picks

Everett for new plant

Messier-Dowty, which will supply the landing gear on Boeing's 787, announced it has chosen Everett as the site for an integration plant that will eventually employ some 50 people.

Everett beat out Vancouver, B.C., for the plant, which will complete assembly of the 787 main landing gear before sending it over to the Boeing final-assembly line. Messier-Dowty is looking for a 20,000- to 40,000-square-foot facility nearby.

Messier-Dowty is a subsidiary of French aerospace conglomerate Safran Group, headquartered in Paris. It already has an engineering-design office in Kent that employs some 40 people.

Luigi Mattia, the company's 787 program manager, said the landing gear for the initial 787s, scheduled to enter service in mid-2008, will be sent over complete from the manufacturing site in Gloucester, England.

The Everett site won't be fully operational until 2009.

Seattle Times staff