Vegas carrier to buy new Boeing aircraft

SEATTLE - Primaris Airlines Inc., a little-known Las Vegas carrier with plans to provide low-cost service for business travelers, has become the first U.S. airline to agree to buy Boeing Co.'s new 7E7 Dreamliner.

Primaris will buy 20 Boeing 7E7-8 Dreamliners and 20 737-800s in a deal worth $3.8 billion at list prices, the airline and the Chicago-based aerospace giant said in a joint release Thursday.

Primaris also agreed to take options for 25 additional 737-800s and 15 7E7-8s.

The 7E7, Boeing's newest model, is scheduled to go into production in 2006. Primaris plans to outfit the 737s with 94 seats and the 7E7s with about 150 seats, both in an all-business configuration.

The deal would be the biggest for the Dreamliner since a launch order of 50 planes from All Nippon Airways in April.

Aerospace analyst Paul Nisbet of JSA Research said it wasn't surprising that the first U.S. order is coming from a discount carrier, since many of the traditional U.S. airlines are in such bad financial shape.

"The legacy airlines are certainly not anywhere near capable of paying for new aircraft - in fact they're shrinking their operations quite drastically - so it does leave you with the discount airlines as your only customers in the United States," he said.

According to the news release, Boeing, based in Chicago, and Primaris expect to complete contract negotiations by the end of the year. Primaris is planning to begin service focusing on business travel on domestic routes, like Los Angeles, New York, San Francisco and Chicago, next year and on international routes in 2006.

The first 20 737s are for delivery between 2007 and 2010 and the 7E7s between 2010 and 2013. The 737s are to be equipped with CFM56-7B engines and an engine choice for the 7E7s will be made over the next month, Primaris said.

Battling to regain world supremacy in commercial jet manufacturing from Airbus SAS, Boeing executives have forecast 200 orders for the new 7E7 this year.

Boeing has logged 52 firm orders for the 7E7, including the 50-plane launch order from All Nippon Airways and two planes by Air New Zealand. In addition to Primaris, it is in negotiations to sell 10 more airplanes to two air charter carriers, Blue Panorama of Italy and First Choice Airways of the United Kingdom.

Because of the airlines' woes, Nisbet said he doesn't expect Boeing to meet the 200-plane goal. Also, he said negotiations appear to be taking longer than expected with some carriers, perhaps because Airbus is quietly pitching a new model that would compete more closely with the 7E7. Airbus officials have declined to confirm or deny they are considering a new model.