If you could READ the Seattle Times article posted by CX747 you wouldnt look so foolish. I'll copy it below for you ol' buddy. Now, go read the article and you'll see the $142 million dollar number THEY quote.
It does appear Boeing was trying desparately to GIVE away the 747X and they lost. Now, before that vein explodes in your head, please try to read.
Saturday, September 30, 2000, 12:00 a.m. Pacific
Boeing loses Singapore order
by Kyung M. Song and Stanley Holmes
Seattle Times aerospace reporters
In a decision that could prove seminal in the contest for superiority
between Boeing and Airbus Industrie, Singapore Airlines yesterday placed
an $8.6 billion order for the proposed Airbus A3XX super-jumbo plane.
The influential Southeast Asian carrier, which has one of the largest
Boeing 747 fleets in the world, capped a fierce sales battle between
Boeing and Airbus by announcing it will buy as many as 25 of the mammoth
A3XX planes, including firm orders for 10 of them and options to buy 15
more. The deal is the single biggest order for the A3XX and is perhaps
the first to give a stamp of market approval for the super-jumbo plane.
Singapore chose the A3XX because the plane would hold 55 more seats than
the new, enlarged 747 Boeing is planning. The decision calls into
question Boeing's argument that it doesn't see a large-enough market to
justify building a jet much bigger than the existing 747, the largest
Singapore's order marks the first high-profile defeat for Boeing's
proposed 747X, the company's counter to the A3XX. Three other airlines
have placed Airbus orders, but until Singapore none had so seriously
compared the A3XX and the 747X before choosing Airbus.
Boeing's stock closed yesterday at $64.63, up 6 cents for the day.
Boeing had vigorously maneuvered to thwart the Airbus order, reportedly
shaving more than 20 percent off the $180 million list price of the 747X.
Alan Mulally, president of Boeing's commercial airplanes group,
downplayed the defeat. But Boeing executives acknowledged privately that
they were deeply disappointed.
Singapore's decision has reshaped the jumbo-jet competition by anointing
the A3XX as a legitimate challenger to Boeing's 32-year monopoly for
airplanes that haul more than 400 passengers.
Boeing Commercial derives a quarter of its profits and a fifth of its
airplane sales from the 747. That makes the jet Boeing's most profitable
model in an otherwise low-margin, extremely competitive industry. The
success of the A3XX could seriously jeopardize the profits of the 747.
Boeing made an all-out push for the deal, offering to reduce the 747X's
price to as low as $142 million, according to people with knowledge of
the negotiations. Boeing even offered to buy back some of Singapore's
existing 747-400s and take back the new 747X version after 10 years if
Singapore didn't want it.
Boeing officials declined to discuss specifics of the Singapore
negotiations, but Mulally acknowledged that "we offered Singapore a very,
very attractive" proposal.
Singapore valued the 25 A3XXs at $8.6 billion, an average of $344 million
for each aircraft, including spare parts. That's significantly higher
than the list price for the A3XX, which ranges from $218 million to $240
But it is also well-known that launch customers typically receive sizable
discounts. Singapore officials said the purchase price includes an
inflation adjustment, but it is unclear how much Singapore will pay for
the entire order. It declined to disclose specifics of the deal other
than to say it was a "hotly contested competition."
Despite Mulally's assurances about the 747X's future, Boeing's attempts
to make the Singapore sale with such favorable terms may raise serious
questions about the future of the program: Can the redesign of the
venerable 747 hold its own against a newcomer with more seats and new
Cheong Choong, Singapore's deputy chairman and chief executive, said the
A3XX's larger capacity was the answer to the growing clash between
airport congestion and the need to carry more passengers. He added that
the A3XX will enable the carrier to earn more profit on each seat without
Choong's comments seemed to undermine Boeing's claim that the 747X would
offer lower operating costs than the A3XX.
Some analysts cautioned, though, that Singapore's role as an influential
carrier may be a bit overblown. Not all of Singapore's airplane purchases
have fared well. It also was an early buyer of the Douglas MD-11 - a
slow-selling, gas-guzzling widebody jet that few other airlines chose to
"Singapore is an extremely sophisticated customer that enjoys being an
early adopter, but (the deal) doesn't frankly say anything about the
viability of the 747X," said Pierre Chao, an aerospace analyst for Credit
Suisse First Boston. "Boeing will ultimately have to address the
seat-size issue, but it won't be until 2010 and beyond. There is quite a
bit of room for the 747X to be a viable product."
Even with the Singapore victory, Airbus faces some steep challenges. The
European planemaker remains short of the 40 or 50 firm orders it needs to
launch the A3XX later this year. In addition to the 10 firm orders from
Singapore, Airbus has "commitments" for another 22 A3XX and options for
five more, from Emirates Airlines, Air France and International Lease
Finance Corp., an influential aircraft-leasing firm.
With Singapore's first delivery scheduled for early 2006, that airline's
passengers will be first to fly aboard the world's biggest jetliner.
Richard Aboulafia, an aerospace analyst with the Teal Group, said
Singapore's lead could spark more A3XX orders from other major carriers.
Qantas of Australia, Cathay Pacific of Hong Kong and Virgin Atlantic of
Great Britain are among five remaining airlines that have expressed
interest in the plane so far but haven't placed orders.
Singapore plans to fly the A3XX as far as 8,600 miles and deploy it on
high-traffic routes to London, Los Angeles, San Francisco, New York,
Tokyo, Hong Kong and Sydney. By the time the A3XX enters service,
Singapore expects enough traffic on those routes to keep the bigger plane
just as full.
Singapore does have options on 10 747-400s, a model it already flies with
386 seats. Choong said the A3XX order will not affect Singapore's future
purchases for that plane.
With 44 747s, Singapore has the world's sixth-largest fleet of the jumbo
jet. Mulally held out hope that Singapore may still buy some 747Xs in the
future. However, Choong all but ruled that out, saying Boeing's plane did
not meet the airline's needs.
"The two aircraft are made for the same mission," he said. "It was one or
the other for us."
Kyung Song's phone: 206-464-2423. E-mail: [email protected]
Holmes' phone: 206-464-2732. E-mail: [email protected]
Copyright © 2000 The Seattle Times Company