Emirates Announces US$34.9 Bln Aircraft Order

[Naim 6]

If the UAE economy is a bubble, this could spell huge trouble for everybody in the future.

 

November 12, 2007 16:01 PM

 

Emirates Announces US$34.9 Bln Aircraft Order

 

DUBAI, Nov 12 (Bernama) -- Emirates Airlines has announced a US$34.9 billion aircraft order comprising 120 airbus A350s, 11 A380s and 12 Boeing 777-300Ers, the largest-ever aircraft commitment in civil aviation made by any airline in a single order.

 

Sheikh Ahmed bin Saeed Al-Maktoum, Emirates' chairman and chief executive, announced the massive order at the 10th Dubai Air Show on Sunday.

 

He signed the contracts for the order with Tom Enders, Airbus' president and chief executive officer, and Lee Monson, vice president of Middle East and Africa sales, Boeing Commercial Airplanes.

 

The agreement with Airbus comprises firm orders for 50 A350-900s and 20 A350-1000s, plus 50 options for the A350-900s, Emirates said in a statement here.

 

The first A350 will be delivered to the Dubai-based airline in 2014.

 

Emirates also firmed up orders on the eight A380s for which it had signed letters of intent earlier this year, and placed firm orders for an additional three of the double-decker aircraft, bringing its total firm order for the A380s to 58.

 

The contract with Boeing is for 12 firm orders of the 777-300ERs, valued at US$3.2 billion.

 

With this new order, Emirates now has 57 Boeing 777s pending delivery and is set to become the world's largest 777 operator in the next few years.

 

Sheikh Ahmed also inked agreements with Sir John Rose, chief executive of Rolls Royce, for the Trent XWB engines to power Emirates' new A350s; with Bruce Hughes, president of Engine Alliance, for the GP7200 to power its additional A380s; and with Scott Donnelly, president and chief executive officer of GE Aviation for the GE90 engines to power Emirates' 777-300ERs.

 

In total, Emirates' firm aircraft and engine orders announced Sunday are worth US$23.4 billion -- a value that increases to US$34.9 billion if the 50 options are included.

 

"Emirates is committing close to US$35 billion today for new aircraft. Our total order includes 93 aircraft on firm order and 50 on option. Once again, Emirates is making aviation history," Sheikh Ahmed said

 

Emirates' total order book now stands at 246 aircraft, all wide bodied and worth over US$60 billion.

 

Meanwhile, the five-day Dubai Air Show which started Sunday is expected to attract up to 40,000 visitors.

 

It is displaying over 140 aircraft from across the globe, including a host of new-to-market models ranging from strike fighters to trainers as well as from VIP business jets to heavy cargo carriers.

 

http://www.bernama.com.my/bernama/v3/news_lite.php?id=295625

 

-- BERNAMA

[Walter Sim 1]

OH MY GOD.

 

120!!

[Azreen 0]

Those in the trading and financial circles are talking about an economic slowdown in Dubai, but the question is when? However, it is clear that strategically Dubai (UAE) needs to make money from other industries such as the service sector as oil money begins to dwindle, hence we see Emirates taking a large position on purchasing aircrafts at a mind boggling rate and going head to head with SQ.

 

I personally think the bubble will burst but I hope China and India will be able to absorb the burst because otherwise it might cause a global slowdown. The US economy is fragile at this point with the sub prime mortgage sector causing havoc to the financial sectors. And I don't think we can rely on the US anymore to absorb. I just hope there weren't too much Arab money involved in the sub prime market meltdown that it might cause a knock on effect on the Gulf states.

 

But who really knows???

[Naim 6]

...

I personally think the bubble will burst but I hope China and India will be able to absorb the burst because otherwise it might cause a global slowdown.

...

 

The prob with UAE is they are lax on foreign money coming in. This could spell trouble because the huge amount of money coming in could be ill-gotten and laundered. And the money could leave/disappear as easily. The infra building frenzy is frightening, so do the treatment of foreign workers from the Indian sub-continent. Go to Deira and see their poor living conditions. No wonder there was a big strike recently.

 

 

[Andrew Yong 0]

I remember our member mention about "MAS most fearest competators not AK but middle east airlines they buy planes like sugar cane!!!!" Now all become real already !!!

[Seth K 3]

787 program....... <_>

[Kenneth T 0]

With such bulk purchase, AIRBUS will for sure go ahead with the A350S programme,,which may by then incorpoaratews new innovation.

[Loh Wilson 0]

120 A350 ?? This is really ALOT !

[Ivan L. 0]

I used to think that EK growth is amazing, but not anymore. Their growth are just scary. I know they have large growth in passenger numbers, but I doubt it will be sustainable. What they gonna do with all these aircrafts? and 60 billions dollars worth of order? It's more than the budget of some countries out there.

 

I used to love EK for providing good service at decent prices. However, they will get no love from me once they start killing off their competitors.

[Sri Ramani K. 0]

i wouldn't be surprised to hear if EK is going to build their hangar here and probably in another 100 destinations and make it a hub in the near future. talk about good management.

[Isaac 0]

I used to think that EK growth is amazing, but not anymore. Their growth are just scary.

EK is growing like those US carriers from 70s to 90s, such as TWA, PanAM, Eastern, Braniff, United, Northwest etc. All these US carriers mentioned had placed order for 100 aircraft all at once before.

 

[Ivan L. 0]

EK is growing like those US carriers from 70s to 90s, such as TWA, PanAM, Eastern, Braniff, United, Northwest etc. All these US carriers mentioned had placed order for 100 aircraft all at once before.

 

Well.. they didn't order 100 Boeing 747 or 777 at the same time, do they?

[Imran K. 0]

What they gonna do with all these aircrafts? and 60 billions dollars worth of order?

 

When EK initially announced their MAMMOTH expansion plans in the late 90's...i remember some people crying foul, and basically putting forward enormous levels of negativity towards EK's intentions...

 

as of a few days ago...we received our 100th aircraft....

 

and load factors on average are close to 88% throughout all routes....more so the High Density routes.

 

 

[Naim 6]

November 12, 2007 7:51 a.m. EST

WSJ

 

Dubai's DAE to Buy Up to 100 Planes Each From Boeing, Airbus

By J. LYNN LUNSFORD, DANIEL MICHAELS and STEFANIA BIANCHI

 

Dubai Aerospace Enterprise, a state-owned group created in 2006, Monday announced orders for as many as 100 planes each from Airbus and Boeing Co. for $13.7 billion and $13.5 billion, respectively.

 

The Boeing order comprises 70 Boeing 787s and 30 widebody aircraft, the DAE said. The widebody fleet will be split between 787s, 777s and 747s. The price incorporates a deal with General Electric for engines, valued at more than $1.9 billion.

 

Also Monday, Saudi Arabian Airlines said it signed a memorandum of understanding for 22 Airbus A320 aircraft as part of fleet modernization plans, said Airbus, which is owned by European Aeronautic Defense & Space Company, in a statement. The agreement allows the Saudi airline company to increase the order by eight more A320s.

 

Sunday, Dubai's Emirates Airline opened the Dubai Air Show by ordering 70 of Airbus's planned A350 model and 11 of its A380 superjumbo, with a catalog value of $20.2 billion, although big customers like Emirates generally receive large discounts. Emirates ordered 12 of Boeing's 777 model, with a catalog value of $3.2 billion.

 

The Dubai trade show itself offers a clear sign of how the Persian Gulf, awash in cash from record petroleum prices, has managed to gain stature. For governments around the region and their state-owned airlines, the event is an opportunity to further assert themselves as players in the global community.

 

Dubai boasts the world's tallest building, while next-door Abu Dhabi will host the first Louvre Museum outside Paris. Both are competing with nearby Qatar to become the region's financial capital. "The Dubai Air Show used to be a regional event," said John Leahy, chief commercial officer for customers at Airbus. "Now it is clearly one of the major shows in the world."

 

Air shows, which occur once or twice a year in different parts of the world, have become a prime stage for announcing agreements that have been struck in secret during the weeks and months before. For Boeing and Airbus, the volume of deals to be announced in Dubai is a bit of a surprise because many in the industry had expected the relentless drumbeat of sales over the past three years to slow. Instead, the emergence of carriers in the Middle East, China, India and Latin America has boosted jetliner demand, even as more established carriers in the U.S., Europe and other parts of Asia have held off or placed more modest orders.

 

In addition to the DAE and Emirates order, Saudi Arabian budget carrier NAS ordered 20 Airbus A320 jetliners, with a catalog price of $2.2 billion. Qatar Airways used the air-show stage to acknowledge 30 Dreamliners that previously had been carried on Boeing's books as "unidentified" at the customer's request. In addition, the carrier said it would order five additional 777s, with a catalog value of more than $1 billion.

 

Among other orders expected at the show are ones from Royal Jordanian Airline for as many as 15 Dreamliners, according to a person close to those talks. Kuwait's Aviation Lease & Finance Co. was also in advanced negotiations to add as many as 10 more Dreamliners to its previously announced order for 12 of the planes, according to people familiar with the deals. All the companies are government-owned.

 

The flurry of orders comes at the end of a banner year for Boeing and Airbus. Boeing booked gross orders for 966 airplanes through Nov. 6, almost half of which are for widebody models such as the 787 Dreamliner and 777. Those figures don't include several recently announced orders, including an order from British Airways PLC for 24 Dreamliners. The airline at the same time said it would order 12 Airbus A380s. Airbus booked 854 gross orders through Sept. 30, although with a lower percentage of the more-profitable widebody models than Boeing. Airbus plans to update its tally through October today at the air show and could close the order gap with Boeing or even surpass it.

 

--August Cole contributed to this article.

 

Write to J. Lynn Lunsford at lynn.lunsford@wsj.com1, Daniel Michaels at daniel.michaels@wsj.com2 and Stefania Bianchi at stefania.bianchi@dowjones.com3

 

URL for this article:

http://online.wsj.com/article/SB119486553803789932.html

[FK Wong 0]

Perhaps they could be in the deal to hold up as much order as possible.Why they do it?(this is what i think otherwise it is perhaps true that they really really need those aircrafts)

 

Example

 

Delivery slots available for the A350

 

2014 - Jan - Dec 95% of the slots are taken up by emirates

 

Other competitors is in dire to replace their fleets with the A350 in that year and unable to obtain any slots due to occupancy by emirates.

With emirates taking up most of the slots , the competitors have no choice but to look for them either on the hire purchase basis or lease basis.

Extra $$$$ from selling and leasing.

[Naim 6]

Perhaps they could be in the deal to hold up as much order as possible.Why they do it?(this is what i think otherwise it is perhaps true that they really really need those aircrafts)

...

Extra $$$$ from selling and leasing.

 

 

Speculating, just like those hedge funds and investments banks driving oil prices up?

 

UAE is doing risky business - hot money can go elsewhere, oil prices can collapse.

[Andrew Ong 1]

News release from Airbus:

 

Emirates Airline buys 70 Airbus A350s and 11 additional A380s

11 November 2007

 

After an intensive evaluation process, Dubai based Emirates Airline has signed a firm contract for 81 Airbus wide-body aircraft (50 Airbus A350XWB 900 plus 20 -1000, and 11 additional A380s) in an agreement which could eventually rise to 131 aircraft. The order was signed at the 10th Dubai Airshow between Sheikh Ahmed Bin Saeed Al Maktoum, Chairman, Emirates Group and Tom Enders, Airbus President and CEO.

 

The order includes the firming up of eight A380 aircraft announced at Le Bourget in June plus an additional three. This brings Emirates’ total incremental A380 orders in 2007 to 15 aircraft making Emirates the largest A380 customer with 58 firm orders. In addition the contract also includes the possibility for an additional 50 A350 XWBs. The firm orders have a list price value of US 20.2 billion dollars.

 

Sheikh Ahmed Bin Saeed Al-Maktoum, Emirates Chairman and Chief Executive said, “The A350 XWBs and A380s will play an important role in supporting Emirates' and Dubai's growth plans. As the leading international airline for the 21st century, it made sense for Emirates to choose the A350 XWB - an aircraft designed with 21st century technologies. It offers the latest efficiencies in operational economics and environmental performance, balanced with the latest passenger comfort. We are also adding more A380s to our order, to match our new growth plans which are aligned to Dubai's aim to attract 15 million visitors a year by 2012."

 

“Emirates Airline is placing great faith in our A350 XWB and A380 programmes as well as in our company and we are rightfully proud”, said Tom Enders, Airbus President and CEO. “Our products offer unmatched performance and passenger comfort as well as reduced fuel burn which not only makes good business sense but is also good for the environment”, he added.

 

The A350 XWB (Xtra Wide-Body) is Airbus’ response to market demand for a medium-capacity long-range widebody family. Designed with airlines’ priorities in mind, the A350 XWB confronts the challenges of high fuel prices, rising passenger expectations and increasing environmental concerns. Available from 2013, it has an entirely new, uncompromised, 21st century design with a wider and taller fuselage for extra space and passenger comfort.

 

 

Being greener, cleaner, quieter and smarter, the A380 is already setting new standards for air transport and the environment. The A380 has unmatched fuel efficiency and is significantly quieter than any other large aircraft flying today producing only half as much noise on take-off as the former largest commercial aircraft. The A380 has the roomiest and quietest cabin in the sky, and provides vital extra passenger capacity without increasing the number of flights. In a typical three-class, 525-seat configuration the A380 seat mile cost are 20 percent lower and range capability over 1,000 nautical miles longer than the former largest commercial aircraft.

 

Airbus is an EADS company.

 

 

That's one big order :blink:

Edited November 12, 2007 by Andrew Ong

[Nik H. 3]

UAE has OIL? Or are there other things driving their economy?

 

I know little of all this.

[Imran K. 0]

UAE has OIL? Or are there other things driving their economy?

 

I know little of all this.

 

The UAE has quite a substantial oil reserve...though over the past 8 years or so, the government has opted to develop the country as a financial/tourism hub thus allowing the country a certain degree of freedom from the shackles of the volatile oil industry.

 

Though to date, the majority of the country's income is derived from the sale of oil, a substantial portion of its income comes from both tourism, and other financial benefits derived from the success achieved by Dubai specifically in the financial/corporate sector.

[Naim 6]

UAE has OIL? Or are there other things driving their economy?

 

I know little of all this.

 

Yes, oil & gas provide 1/3 of UAE's GNP. They have 10% of world's oil reserve and 4% of gas. But they have been prudent and have been diversifying their economy (unlike Brunei, say). Japan is the main buyer. More details HERE.

[Hardeep P. 0]

 

Does it mean that EK is not ordering the 747-8 I now? I heard rumors that EK was coining with the idea of ordering abt 20 747-8 I and the announcement will be made at the Dubai Air show. If so, another big loss to the 747-8 I project. Real pitty. Apart from LH, no other airliner is interested in it for their pax business. Wonder why?

 

Apparently, EK wanted Boeing to reduce the length of 747-8 but fly further (8400nm at least so it can connect to the west coast of US- LAX, SFO etc) while Boeing rather have capacity then distance (467 pax in 3 class and 8000 nm).

 

Now with Boeing loosing the 747-8 from BA and EK (I hope not), I see the future of the 747-8 Intercontinental dark. Mayb TG with 8 orders apparently, CI with a few more and CX and JAL?

 

[Kee Hooi Yen 0]

Perhaps EK may think of set up its own aircraft manufactory line....

[Guest Michael]

Emirates has a lot of greed doesn't it? It will take competition away from MAS, SIA, CX, TG eventually. What day are 3rd quarter results going to be released by MAS any way?

[S V Choong 4]

Speculating, just like those hedge funds and investments banks driving oil prices up?

 

UAE is doing risky business - hot money can go elsewhere, oil prices can collapse.

 

I wonder what their load is like in reality. I heard their load between AKL-BNE, AKL-MEL and AKL-SYD are all rather empty but relying heavily on underbelly cargo. Their prices are not competitive either.

 

I believe they are doing risky business by dumping all these seats worldwide. How effective this strategy of running business is questionable, probably not in the short run but it looks like it will start to bite in the long run.

Edited November 13, 2007 by S V Choong

[Alan B. 5]

EK's plan for world domination continues!!!!!!