Oman: Boeing May Lose $1 Billion Oman Order to Airbus If 787 Delayed.

Byline: kusumv03

Boeing Co. risks losing a $1 billion order for its 787 Dreamliner aircraft to a rival model from Airbus SAS if the U.S. plane s production schedule slips any further, Gulf carrier Oman Air said today.

Oman, which has ordered six Dreamliners for delivery starting in the first half of 2014, may turn to Airbus s A330 widebody if a two-year delay to the 787 is extended, Chief Executive Officer Peter Hill said in an interview.

I really hope they get their act together, Hill said. Further delays might mean that we d have to look elsewhere.

Boeing says the Dreamliner will fly this year and that the aircraft will be delivered to the first customers at the end of 2010. The plane s production schedule has slipped more than two years since the first of five delays emerged in October 2007.

Muscat-based Oman Air already has seven A330s from Airbus on order, with the first four scheduled for handover this year. Buying the Toulouse, France-based planemaker s newer A350 model is not an option as the carrier would be too far down the delivery list, said Hill, who spoke in London.

The CEO said he s not yet actively looking at alternatives to Chicago-based Boeing s Dreamliner, which has a list price that averages about $178 million for the various versions.

Positioned for Rebound

Oman Air has no plans to defer any planes as a response to the recession and needs the delivery positions to take advantage of any rebound in demand for air travel, Hill said. We don t have a view that we should defer, we want to develop routes, we want to expand, he said.

Boeing was trading up 3 percent at $49.49 as of 2:04 p.m. in New York. The stock has gained 16 percent so far this year for a market value of $35.9 billion. Airbus parent European Aeronautic, Defence & Space Co. closed up 0.5 percent at 13.27 euros and has added 10 percent this year, valuing it at 10.8 billion euros ($16 billion).

Oman Air aims to facilitate tourism to Oman rather than to compete with Middle Eastern rivals Emirates Airline and Qatar Airways in building a global hub, Hill said.

Oman as a destination is a premium product, the CEO said in the interview. We re not really looking for the backpackers, we re looking for mid- to high-class travelers.

The carrier has added Paris, Frankfurt and Munich to its route network this year and is considering flights to further European destinations such as Prague and cities in Italy and Scandinavia, he said. New services to the Maldives and Sri Lanka are designed to promote two-sector holidays, where travelers stop in Oman before moving to a second destination.

As part of the expansion Oman Air has boosted capacity 23 percent this year with five Boeing 737-800 aircraft. The carrier will probably lose money as it adds planes and routes, said Hill, who is targeting break even within five years. We won t be making money this year, he said. We re designing the airline to be sustainable in the future.

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