UPS orders 27 Boeing 767s to meet demand

United Parcel Service Inc. ordered 27 Boeing Co. 767-300 freighters valued at as much as $3.89 billion to meet demand from increasing global trade.

The purchase comes as Atlanta-based UPS remains in talks with European plane maker Airbus over its delayed order for 10 A380 jumbo freighters. The new Boeing planes aren’t intended to replace the A380s and will instead fill shorter-range needs, UPS said. The 767s will be delivered from 2009 to 2012.

UPS is expanding its fleet of 267 jet aircraft as global trade increases shipments by air. Such deliveries accounted for almost 35% of UPS’ 2006 sales, or $16.8 billion. The 767s will be used on routes between the U.S., Europe and Latin America, and within Asia and Europe.

“This is the one place where there is strong, sustainable growth,” said Daniel Ortwerth, an Edward Jones & Co. analyst. “We regularly see FedEx moving and taking initiative in this market. UPS can’t be left behind.”

FedEx Corp., based in Memphis, Tenn., is the world’s largest air-cargo company and UPS’ biggest rival in global package shipping. UPS’ order nearly doubles its existing fleet of 32 767s.

Boeing shares rose 67 cents to $90.72.

Boeing’s 767 production line, in Everett, Wash., has been jeopardized because more airlines are ordering Airbus 787 models, and because Boeing in 2004 lost a sole-source contract for a U.S. military aerial refueling tanker based on the 767.

UPS is the largest operator of 767 freighters. It was the first to buy the planes from Boeing in 1993. The jets, which are equipped with General Electric Co. engines, can carry as much as 132,200 pounds of freight and fly 3,000 nautical miles.