YEAR-END DIVIDENDS

Boeing recorded an end-of-the-year bonus when Continental Airlines became the first U.S. network carrier to order the 7E7, buying 10 of the mid-sized jets with a book value of $1.3 billion.

Announced last week, the decision to buy came on top of a commitment for 30 aircraft by Japan Airlines (JAL) made two weeks ago. Taken together, the two commitments are a double blessing for Boeing: Both carriers are among the airline establishment and both are advocating the long-term value proposition of the 7E7 as the revolutionary long-haul, cost-saving aircraft that Boeing is espousing in its marketing.

Along with its initial commitment, JAL took options on an additional 20 aircraft.

AT LIST PRICES, JAL's firm order is worth $3.6 billion, although neither the Japanese nor the American carrier is likely to pay full price, being among Boeing's best customers. JAL's deliveries are to begin in 2008, the same year as All Nippon Airways, its domestic rival and the first 7E7 customer.

"The 7E7 is the widebody of the future for Continental and will provide the platform for our long-term international growth," said President and CEO Larry Kellner. Continental has chosen the standard 7E7-8, with deliveries beginning in 2009. The aircraft is to operate internationally from Continental's New York and Houston hubs.

Continental's low-cost structure puts it in a strong position among U.S. network carriers, although it is struggling with losses this year.

The airline has been one of Boeing's biggest 757 customers and said it will lease eight 757-300s from Boeing for delivery beginning in July. It also accelerated to 2006 delivery of six 737-800s originally to be delivered in 2008. Boeing is to provide backstop lease financing for the 737s. Continental's board still must approve the aircraft purchases and lease ageement, but is expected to do so at a Feb. 28 meeting.

Both Continental and JAL will be counted as launch customers for the new 200-300-seat twinjet. Neither has announced a choice between the Rolls-Royce Trent 1000 or General Electric GenX to power their 7E7s.

As of late last week, Boeing's official 7E7 order count stood at 56 aircraft: 50 by launch customer All Nippon Airways, two by Air New Zealand and four from Italy's Blue Panorama. But counting commitments, Boeing has reached the 122 mark, including the 30 from JAL, 20 from the startup Primaris Airlines of Las Vegas, six from the U.K.'s First Choice and 10 from Continental. If exercised, JAL's 20 options would raise the total order book for the 7E7 to 142.