UPDATE: AIR SHOW: Boeing Gets $7.2 Billion Air Lease Order

-Air Lease Corp. orders 75 Boeing 737 Max Plains

-Other Lessor Companies expected to sign 737 Max deals

-Boeing plans to build larger version of 787 Dreamliner in South Caroline

(Adds detail, background throughout)

By DANIEL MICHAELS And JON OSTROWER

FARNBOROUGH, England-Boeing Co. (BA) Monday said it had an order from Air Lease Corp. (AL) for 75 737 Max aircraft with a list value of $7.2 billion, the first major deal at the start of Europe's big air show.

Boeing is expected to win orders from at least two leasing companies that should help the U.S. plane maker consolidate its lead in orders over rival Airbus this year.

Boeing is also prepared to assemble the larger version of its 787 Dreamliner, which is being showcased at the Farnborough International Air Show this week, at the second production facility it has set up in South Carolina, a senior industry executive said Monday.

Air Lease Corp.'s Chief Executive Steve Udvar-Hazy said Boeing told him the 787-9 version of the Dreamliner that the aircraft leasing company has ordered could be made at the North Charleston factory that has just started producing the smaller 787-8 version.

Producing the 787-9 in South Carolina as well as its main factory near Seattle would give Boeing more flexibility as it looks to boost production to its target of 10 planes a month by the end of next year from its current level of 3.5.

Mr. Udvar-Házy's comments came as Air Lease announced the firm order for 75 of the new Boeing 737 Max, a deal that could be expanded to as many as 100 aircraft.

Air Lease said it expected to take the first of the new planes in 2018, a year after launch customer Southwest Airlines Co. (LUV) is due to receive the plane.

Rival Airbus also is expected to announce deals at the air show this week, including its first-ever order from an Israeli airline, people familiar with the negotiations said.

Kuwait-based Aviation Lease & Finance Co. also is in talks for the Boeing model, but an order may not be announced at the Farnborough show, which began Monday near London. Executives at the company weren't available for comment.

United Continental Holdings Inc. (UAL)in coming days could confirm a long-expected order for 100 of the 737 Max and options to buy 100 more, although its announcement is unlikely to occur at the show, the people said. An airline spokesman declined to comment.

The 737 Max would revise a Boeing's popular single-aisle model, which already has been updated several times. Boeing is trying to catch up with Europe's Airbus, which last year far outpaced Boeing with orders for an update of its competing A320. The update, dubbed the A320neo, has garnered more than 1,400 orders, while the 737 Max has received fewer than 500.

Airbus, meanwhile, is completing deals that could double its number of airplane orders this year when they are disclosed at the air show this week, people familiar with the negotiations said.

Among contracts that the unit of European Aeronautic Defence & Space Co. (EAD.FR) hopes to unveil in coming days is its first from an Israeli carrier.

Arkia Israel Airlines Ltd. is in final talks for Airbus A320-family single-aisle airliners, these people said.

An Airbus deal with Arkia would break a long-standing lock that Boeing has had on the Israeli passenger-jet market. Israel's national airline, El Al Israel Airlines Ltd. several years ago placed an order with Airbus planes, but the contract was later annulled by the government. Arkia executives couldn't be reached.

An Airbus spokesman declined to comment about possible orders.

Airbus also could disclose at the show its first order from UTAir Group for A320-family planes. The Siberian carrier has been a Boeing customer and last year ordered 40 Boeing 737s. UTAir executives weren't available for comment.

Airbus hopes to disclose other orders this week, including one from Philippine Airlines Inc. to increase its fleet of Airbus A330 long-range planes. The carrier didn't respond to a request for comment.

Cathay Pacific Airways Ltd. (0293.HK) looks set to increase its order for Airbus's planned A350 model with an order for the large A350-1000 version. An A350 order from the Hong Kong carrier could put Airbus in the black on the model for the year.

Airlines through June canceled seven more orders for the plane than they had placed. Cathay already has 36 of the smaller A350-900 model on order.

The possible orders could top 200 planes, according one of the people familiar with the negotiations.

Airbus through June had firm orders for 230 planes this year, after cancellations. Boeing, in comparison, had 440 orders net of cancellations through June 30. Airbus last year posted a record 1,419 net orders and company executives have said they expect fewer this year.

A person familiar with Airbus's plans said it remained unclear how many of the possible orders will be announced during the air show.

Write to Daniel Michaels at [e-mail]