Airline deal with Boeing boosts Iraq

Officials hail purchase as sign of economic rebirth

By David R. Sands | Monday, May 26, 2008

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Iraqi Airways, nearly grounded by decades of mismanagement and economic sanctions under the regime of Saddam Hussein, is back on the runway with a multibillion-dollar order for a fleet of new Boeing passenger planes to service domestic routes and reclaim a share of the increasingly lucrative Middle East market.

Iraqi officials hail the deal as a symbol of the country's slow but steady economic rebirth, and also as a sign that they are finally translating the country's vast oil wealth into tangible gains for ordinary Iraqis.

Iraqi Minister of Finance Bager Jabor Al Zubaidy called the deal a "new beginning for Iraq," and Iraq's U.S. ambassador, Samir Sumaida'ie, said the Boeing order was a clear sign that his country was taking on the expense of funding its own reconstruction.

"We are willing to pay more and more and, ultimately, all of our reconstruction costs," Mr. Sumaida'ie told The Washington Times in an interview earlier this month, acknowledging criticism from U.S. lawmakers that Iraq should shoulder more of its reconstruction bill.

One sign of the deal's importance in Baghdad was the presence of Prime Minister Nouri al-Maliki and senior U.S. diplomats along with Boeing officials at the May 5 contract signing.

The $5.5 billion Boeing deal, with commitments and options for up to 55 new passenger planes, marked one of the largest purchase orders by the Iraqi government since Saddam's ouster in 2003.

Airbus SAS, the European manufacturer that surpassed Boeing as the world's largest aircraft manufacturer in 2003, was not invited to bid for the contract. Some in the industry say the omission was not surprising.

"Not to be too cynical about it, but I do expect there was a connection between the war and the Boeing deal," said Scott Hamilton, an aviation industry consultant in Issaquah, Wash.

"From a practical standpoint, given France's stand on the war, there was just no way this order was going to go to Airbus," he said.

Under terms of the contract, Iraq will buy 30 Boeing 737 commercial airplanes and 10 of the Chicago-based manufacturer's new 787 "Dreamliners," with options to purchase at least 15 more planes. The Dreamliner, which can seat up to 330 passengers, is the first new Boeing passenger model since the 777 was introduced in 1990.

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