Boeing Company (BA) bagged an order for five 747-8 series Intercontinental jetliners from Korean Air. The $1.5 billion deal is the first Asian airline order for the passenger version of the new, fuel-efficient 747-8 planes. Korean Air already has arrangements to operate seven 747-8 Freighters. Korean Air plans on flying the 747-8 Intercontinental on long-haul routes to the Americas and Europe.
The new 747-8 Intercontinental is 18.3 feet (5.6 m) longer than the 747-400. As a result, the 747-8 Intercontinental has an additional 51 seats to a total of 467 seats in a three-class configuration as compared to the 747-400. It also offers a range of 8,000 nautical miles (14,815 km). Using the new GEnx-2B engines, the 747-8 provides a quieter, more fuel-efficient airplane. The 747-8 also provides nearly equivalent trip costs and 13% lower seat-mile costs than the 747-400, plus 26% greater cargo volume.
The 747-8 also features a new wing design and an upgraded flight deck. The airplane interior incorporates features from the 787 Dreamliner, including a new curved, upswept architecture that will give passengers a greater sense of space and comfort, while adding more room for personal belongings.
The 747 program is in the later stages of the 747-8 Intercontinental design phase. Assembly of the airplane is set to begin around mid-2010, with the first delivery of the passenger version scheduled for the fourth quarter of 2011.
With the addition of the Korean Air order, Boeing has secured 110 orders for the 747-8. Thirty-two of the orders are for the 747-8 Intercontinental, and the remaining 78 are for the 747-8 Freighter.
The 747-8 Freighter series will boost the commercial aircraft segment of Boeing. In the recently reported third quarter of fiscal 2009, the company booked 96 gross orders. The company finished the quarter with segmental backlog of $254 billion.
Headquartered in Chicago, Boeing is the world’s largest manufacturer of commercial jet liners and military aerospace products (based on total sales). Boeing designs and produces commercial airplanes, defense systems, and civil and defense space systems. It is also the largest NASA contractor. We maintain our market Neutral recommendation on the shares.
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