By Alwyn Scott and Mike Stone
NEW YORK/WASHINGTON (Reuters) – Gulf carrier Qatar Airways ordered 40 Boeing Co <BA.N> widebody jets valued at $11.7 billion and signed a letter of intent for up to 60 narrowbody 737 MAX 8 jets worth $6.9 billion, Boeing and the airline said on Friday.
The agreement for up to 100 jetliners potentially worth $18.6 billion helps fill out Boeing’s order book in a year when sales have slowed sharply, and amid tough price competition with European rival Airbus <AIR.PA>.
The deal marked a key commitment by Qatar Airways to Boeing’s new 737 MAX jetliner, after it refused to accept three of Airbus’ competing A320 aircraft earlier this year. Qatar has not ordered 737s previously.
Airline Chief Executive Officer Akbar Al Baker took the opportunity of the announcement in Washington to further press Boeing to build a new jet slightly larger than the 737 to fill a gap in Boeing’s product line.
Asked in an interview when he expected to hear more about that proposed plane, Al Baker said: “Yesterday!”
Ray Conner, CEO of Boeing Commercial Airplanes, in the same interview, said Boeing continues to evaluate such a plane and talk with customers.
“I think we have a pretty good idea today as to what our customers would like to see with respect to seat count, range capabilities,” Conner said, adding that Boeing understands how quickly customers want the plane.
“Now it’s a matter of us going back and doing our homework and figuring out how do we put all of that together,” he said. “I can’t give you a real time frame on that, but we’re certainly working the heck out of it right now.”
The deal for 30 of Boeing’s 787-9 Dreamliners and 10 of its 777-300ER aircraft is significantly larger than an order for five Boeing 777-300ER aircraft worth $1.7 billion that the carrier had been expected to place during Britain’s Farnborough Airshow in July.
That announcement was postponed by Qatar in an effort to speed up U.S. approval of its purchase of Boeing fighter jets, sources familiar with the situation said.
The orders announced on Friday are worth $11.7 billion at list prices, with an additional list value of $6.9 billion if all of the 737 MAX jets are purchased. Airlines typically receive steep discounts on large orders.
Boeing shares were down 0.7 percent at $133.51 in afternoon trading on the New York Stock Exchange.
Qatar Airways’ order is likely to further intensify concern among U.S. airlines about what they term unfair subsidies that Gulf carriers receive.
Earlier on Friday, Delta Air Lines Chief Executive Officer Ed Bastian said Qatar Airways, Etihad Airways and Emirates airline had received $50 billion in illegal subsidies, financing that allows the carriers to offer some 30 flights a day to the United States at fares substantially below what U.S. airlines can offer.
The United Arab Emirates and Qatar together have a population the size of the U.S. state of Ohio, but “they have more widebodies on order than all the Chinese airlines and U.S. airlines combined,” Bastian said at an event in New York.
“That doesn’t sound fair, that doesn’t sound free,” he said.
The three Gulf carriers deny receiving subsidies, and other powerful U.S. businesses, including FedEx Corp <FDX.N> and Boeing, oppose changes to Open Skies agreements with Gulf nations.
(Additional reporting by Mike Stone in Washington; Editing by Phil Berlowitz and Lisa Shumaker)