Boeing Adds Orders From FedEx, Cathay Pacific

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As of December 17, The Boeing Co. (NYSE: BA) had booked a net total for 1,074 new planes in 2013, compared with a net total of 1,314 new orders reported by archrival Airbus. On Friday, Boeing added an order for 21 new 777X aircraft from Cathay Pacific Airways, on top of an order for two new 767 freighters from FedEx Corp. (NYSE: FDX).

The FedEx order is something of a mixed blessing, however, because the package delivery firm at the same time delayed for two years an order for 11 new 777F freighters. FedEx already had orders for 50 of the 767 freighters on Boeing’s order book. The deferment of the 777F order comes as a result of a slowdown in freight traffic between the United States and Asia.

Cathay Pacific’s order is valued at $7.5 billion at list prices, but the actual amount is certainly lower than that. Asia’s largest international carrier is working to replace its fleet of four-engine 747-400 jets with the new, more fuel-efficient two-engine 777X.

The new planes were first introduced last month at the Dubai Air Show. First deliveries of the new planes are expected in 2021 and will stretch out through 2024. Boeing reported that it took orders for 259 of its new 777X mini-jumbo jets at the show, and that the value of the orders totaled more than $95 billion at list prices. What the company does not have yet is a place to build the planes.

Boeing’s local International Association of Machinists & Aerospace Workers (IAM) union rejected a contract offer that the company said would have kept the manufacturing plant for the 777X in Washington state, and a somewhat sweetened offer proposed by Boeing last week was rejected without even going to a vote of the IAM membership. The main items under dispute are a change to the pension plan and a revised salary schedule. Boeing said it is considering offers from 22 states competing for the 777X manufacturing plant.

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