NOT EMBRAER? SHOCKING:

Airbus customer turns to Boeing with billion-dollar 777 order (Dominic Gates, 10/31/06, Seattle Times)

Airbus' largest customer in Latin America, TAM Airlines of Brazil, has defected to Boeing with an order for four 777-300ERs.

The deal is worth about $1 billion at list prices, but its significance goes beyond money. Until now, TAM's fleet of large airplanes has been all-Airbus. The order is a huge vote in favor of the 777, over both the A340 and the forthcoming enlarged A350.

The decision cements a growing Boeing hold on this segment of the large jet market, where the twin-engined 777 has almost killed the four-engined and therefore less fuel-efficient A340. On Saturday, Emirates of Dubai canceled an order for 10 of the A340s and said it would switch to 777s.

In addition, because Airbus has re-positioned its much-postponed A350 as a contender against both the 787 and the 777, this order is a blow to the A350.

MORE:
Loyal Airbus fan goes Boeing with 777 order (Dominic Gates, 10/31/06, Seattle Times)

Boeing won the order on more than the 777's merits.

TAM needed midsize wide-bodies right away. Just last week, Brazilian aviation authorities granted it rights to fly additional routes into Europe.

Those rights must be exercised within six months or are lost.

Boeing had available some used planes that will fly until the 777s are delivered in mid-2008, and that sealed the win.

"It is very important to be on time to market," said TAM Chief Executive Marco Antonio Bologna in a conference call from Seattle with Brazilian and U.S. journalists. "Boeing gave us a complete solution."

Boeing Capital, the company's airplane-financing unit, was able to supply TAM three used MD-11 aircraft on a short-term lease.

Industry analyst Scott Hamilton of Leeham.net said this immediate need made TAM "a target of opportunity" for Boeing, giving the sales team a win with long-term implications.