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WASHINGTON (Reuters) -Boeing Co secured a launch order from Qatar Airways for a new freighter version of its 777X passenger jet and a provisional order for 737 MAX jets in a Washington ceremony on Monday coinciding with a visit by the Gulf state’s ruling emir.
Reuters reported https://www.reuters.com/business/aerospace-defense/boeing-nears-qatar-freighter-deal-ahead-emir-visit-sources-2022-01-25 last week that the U.S. planemaker was in advanced negotiations with the Gulf carrier for around 34 of the planned twin-engined freighters in a deal provisionally estimated to be worth $14 billion at list prices.
“(The 777X) will be an absolute world-beater,” Boeing (NYSE:BA) Chief Executive Dave Calhoun said at an afternoon signing ceremony at the White House attended by Qatar Airways Chief Executive Akbar Al Baker and U.S. Commerce Secretary Gina Raimondo.
Qatar is also bridging to the new cargo version of the upgraded 777X with a handful of extra current-generation 777 freighters.
Qatar Airways also signed a provisional order for up to 50 737 MAX jets, making Monday’s deal a potential 100-plane, $30 billion-plus package. Reuters reported the 737 MAX deal earlier on Monday.
The unexpected addition of at least 25 of the jets, with options for another 25, comes days after Airbus SE (OTC:EADSY) revoked an order for 50 A321neo jets as part of a contractual and safety dispute involving a different model.
Airbus declined comment.
The cargo deal represents the first order for a freighter version of the world’s largest twin-engined passenger plane, whose entry to service has been pushed back by more than three years to late 2023 or beyond.
It comes as Qatar Airways is locked in a bitter dispute with Boeing’s European rival Airbus over surface flaws on competing A350 passenger jets.
The airline had dropped a new freighter version of the A350 from its cargo fleet renewal plans, citing the rift over the flaws to paint and lightning protection.
For Boeing, the deal marks a respite from the ongoing impact of a safety crisis over the 737 MAX and industrial and certification delays with the 777X passenger version and 787 Dreamliner – which remains sidelined by production flaws.
Boeing has dominated the air freight market for years through its 767, 777 and 747 cargo jets, though it will be urgently pressing for more orders for the new freighter flagship.
About half of global cargo by value travels by air, and in turn half of that usually goes in the belly of passenger planes.
During the pandemic, many airlines have been forced to park unused passenger jets, driving up demand for cargo space on dedicated freighters at a time when e-commerce has been a lifeline for many during COVID-19 lockdowns.
But economists warn the trends could start to unravel as the pandemic eases.
The amount of additional future revenue for Boeing from the deal would depend on discounts and how many of the freighters are converted from previous orders for 777X passenger versions. Airplanes typically sell for about half the list price.
Qatar is the second-largest customer for the world’s largest twin-engined jetliner with a total of 60 of the 406-seat 777X passenger version on order.
Industry sources estimate that could fall by around a third in the wake of design delays and a drop in near-term demand for long-haul passenger jets, suggesting the number of new airframes resulting from the freighter order could be closer to 15.
