Boeing working on 777 and 787 deals

BERLIN (BestGrowthStock) – Boeing (BA.N: ) is working on deals to sell 777 and 787 long-haul aircraft to a number of airlines but does not see a decisive rebound in wide-body demand until 2012, the head of its passenger jet business said on Monday.

The comments come amid industry talk of a resurgence in demand from Gulf-based carriers and a sudden increase in optimism from airlines industry group IATA, which now sees airlines bouncing back to an overall profit in 2010.

“I hope IATA is right but I am not quite as optimistic,” Jim Albaugh, chief executive of Boeing Commercial Airplanes, told Reuters in an interview.

“I continue to see airlines returning to profitability in 2011, and 2012 will be the year we see them really stepping up to wide-body orders,” Albaugh said on the sidelines of the airline lobbying group’s annual meeting.

Boeing’s European rival Airbus (EAD.PA: ) said on Sunday it would announce orders at the Berlin air show, which runs back to back with the IATA event in the German capital.

Industry executives say there is mounting speculation that Gulf-based heavyweights such as Emirates could announce orders for Airbus and Boeing planes soon.

“We don’t get into details on specific campaigns but we are in discussions with a number of airlines on 777 and 787,” Albaugh said.

Boeing, which recently said it would boost production of its popular 737 narrow-body aircraft to 34 a month, is thinking about whether to raise production further, Albaugh said.

Boeing has also announced increases on the 777 and expects to take decisions on whether to modify that plane or add a larger variant to the 787 Dreamliner late this year or in early 2011, he said.

Albaugh said testing on the 787, a carbon-composite plane which Boeing aims to deliver by the end of the year after a two-year delay, was going “very, very well.”

Boeing has not decided whether to upgrade the best-selling 737 family with new engines and a decision is several months away, he said. Airbus is thinking of putting new fuel-saving engines on its A320 narrow-body aircraft.

“It is a very complex algorithm with all kinds of factors. I am agnostic on which is the right decision,” Albaugh said.

But he vowed to defend the company’s position in the roughly 150-seat market.

“We are not going to abandon the small plane market,” Albaugh said.

Airbus and Boeing are both trying to outwit each other while fending off a challenge from Bombardier’s (BBDb.TO: ) 100-145-seat CSeries family and the longer-term prospect of competition from China.

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(Reporting by Tim Hepher; Editing by James Regan)

Boeing working on 777 and 787 deals