Boeing sets sights on $2 billion United small jets order: sources

Thu Jan 14, 2016 11:47am EST
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By Tim Hepher and Jeffrey Dastin

PARIS/NEW YORK (Reuters) - United Airlines is close to deciding an order for about 30 small jets worth around $2 billion at list prices and Boeing looks well placed to win at least part of the deal after undercutting smaller rivals, industry sources said.

A decision by the Chicago-based airline to pick Boeing's 737-700 jet would be a blow for Canada's Bombardier, which has courted United as a key prospect for its struggling CSeries, and potentially Brazil's Embraer as well.

United's requirement for 100-seat aircraft is in the natural hunting ground for those manufacturers, but Boeing waded in with highly competitive offers for its slightly larger 737-700, which officially seats 126 passengers, the sources said.

Still, a deal has not been finalised and could face last-minute shifts in negotiations that have already been marked by heavy discounting, the sources said.

"It's the January sale," one source close to the talks said.

United said it did not discuss future fleet plans. Boeing said it did not discuss market speculation. Bombardier, Embraer and Airbus, another possible contender, also declined comment.

United is cutting the number of 50-seat jets it contracts to others to fly under its United Express brand and moving toward larger and more efficient planes flown by its own pilots.

United's tender for 30 or more 100-seaters ignited a fierce battle at the lower end of the $130 billion annual jet market, where the Airbus-Boeing duopoly is most under threat.   Continued...

The Boeing logo is seen at their headquarters in Chicago, April 24, 2013. REUTERS/Jim Young