VZCZCXRO1906
PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHRL #3477 3451657
ZNR UUUUU ZZH
P 111657Z DEC 06
FM AMEMBASSY BERLIN
TO RUEHC/SECSTATE WASHDC PRIORITY 6370
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
RUCNFRG/FRG COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY

UNCLAS BERLIN 003477 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
PASS USTR FOR MMOWREY, COMMERCE 3310 P. DACHER 
 
E.O. 12958: N/A 
TAGS: BEXP ECON ETRD GM
SUBJECT: A GOOD TWO WEEKS: BOEING COMPLETES OVER $10 
BILLION OF SALES IN GERMANY 
 
 
Sensitive But Unclassified - Contains Proprietary Information 
 
¶1. (SBU) Summary: Boeing reports it is winning orders from 
Germany's two largest air carriers, Lufthansa and Air Berlin, 
worth almost $11 billion.  Air Berlin and Boeing announced 
November 28 they were finalizing a deal for 85 Boeing 
737-type aircraft worth $5.1 billion.  The order would 
represent the largest ever one-time sale of Boeing 737 
aircraft in Germany.  On December 7, Lufthansa announced it 
plans to buy 20 Boeing 747-8s worth over $5 billion, with 
options to purchase an additional 20 aircraft.  While 
Lufthansa has been under pressure to buy Airbus and Boeing is 
pleased with the sale, Boeing personnel remained concerned 
Airbus might capture a higher percentage of the Lufthansa 
fleet.  End Summary. 
 
¶2. (U) Germany's second largest air carrier, Air Berlin, has 
announced it will buy 85 Boeing 737s with a list price of 
$5.7 billion.  Within the package, Air Berlin intends to 
purchase sixty Boeing 737-800 Next Generation jets.  The 
other twenty-five 737s are part of a previously placed order 
by DBA, an airline Air Berlin recently acquired.  Boeing 
plans to deliver the 85 planes between 2007 and 2010. 
According to Eric Schwartz, Deputy Director of Boeing's 
Germany Office, these planes are already in the pipeline and 
therefore will be delivered first.  Schwartz thought Air 
Berlin's purchase decision was not only influenced by 
Boeing's efficient, low-noise engines, but by the fact 737s 
are lighter than the A320.  This factor leads to cost savings 
on landing rights, which the EU bases on plane weight. 
 
¶3. (SBU) The second large sale within a week was Lufthansa's 
decision to purchase 20 Boeing 747-8 jets for over $5 
billion, with an option to buy an additional 20 planes. 
Schwartz noted the 747-8 can carry 467 passengers and 
effectively bridges the gap in passenger carrying capacity -- 
the A380 carries 550 passengers; the A340 holds 330 -- 
created by Lufthansa's future market and fleet strategies. 
The new 747-8 also costs the same per trip as the current 
747s, but can seat an additional 51 passengers and holds 28% 
more cargo.  Schwartz said Boeing has sold 68 747-8s since 
they went on the market 13 months ago, compared to 140 A380s 
Airbus sold over the past six years. 
 
¶4. (SBU) Despite this purchase, future Boeing sales to 
Lufthansa remain on a downward trend, according to Schwartz. 
The 747 purchase represents the first Boeing sale to 
Lufthansa since 1997 and maintains the current Airbus-Boeing 
fleet composition percentage of 64-36.  This percentage may 
drop as the 737 fleet is retired over the next several years. 
 However, Schwartz would not rule out future sales of 787s to 
Lufthansa, noting that the German airline has again delayed 
the decision on purchasing the reconfiguration of the A350. 
 
¶5. (SBU) Commenting on the woes of EADS and the A380, 
Schwartz noted that Europe's largest aircraft leasing 
company, ILFC, recently changed its order of A380s from cargo 
planes to passenger aircraft.  This decision leaves UPS as 
the sole remaining air cargo company with an A380 order. 
Schwartz thought this fact could make UPS reconsider its 
decision to buy A380s, given the costs associated with the 
equipment needed for operating the A380 as a cargo aircraft. 
Schwartz opined such a decision could have implications for 
Germany's participation in the A380 project, as Hamburg is 
the primary location for producing A380s designed to handle 
cargo. 
TIMKEN JR