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Thursday, February 26, 2004 - Page updated at 12:00 A.M.
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7E7's first sale may be delayed until Boeing chooses engine maker

By Darrell Hassler
Bloomberg News

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SINGAPORE — Boeing said the first sale of its proposed 7E7 aircraft to the world's airlines may be delayed because it hasn't chosen an engine manufacturer to produce what is usually the most costly part of the plane.

Winning the first order "will be more difficult with some customers if we don't know what the engine is," said Thomas Waggener, Boeing's 7E7 marketing director, at the Asian Aerospace 2004 exhibition in Singapore.

Boeing, which is counting on selling as many as 2,500 of the 7E7s over 20 years, is still looking for its so-called launch customer needed to start making the plane.

The 7E7, which can carry between 200 and 250 people, may cost as much as $127 million and will replace Boeing's 767 and 757 aircraft.

Rolls Royce Group, General Electric and United Technologies are competing to develop the engine intended to help Boeing keep its promise of making the airplane at least 15 percent more fuel efficient than similar models.

"They're off making their strategies and designs, and they'll bring us their proposals in about another month," Waggener said.

Boeing's board in December voted to move forward with the 7E7 project after studying the plane design for a year.

Analysts estimate it will cost $10 billion to develop the new plane. Boeing expects to begin 7E7 production in 2006 and deliver its first plane in 2008.

While Boeing Chief Executive Officer Harry Stonecipher has said there will likely be an order in the next few months, Waggener said the company will take the time it needs to choose one or two engine makers. Airlines often prefer two engine makers to encourage competition between them.

Even with the possibility of a delay, airlines still are talking to the three candidates so that they will be ready to make orders when the engine makers are chosen, Waggener said.

"When that is decided, they don't have to take months more to evaluate," he said.

"This is one big package, which is one of the reasons why it could take a long time to make the deal. It's very complex and there are a lot of issues that need to be dealt with."


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