Emirates Airline signs huge 777 deal

Emirates stole the Dubai airshow with a mega-order for 42 777s, with options for 20 more.

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By  Neil Denslow Published  December 1, 2005

Emirates stole the Dubai airshow once again this year with another mega-order. The Dubai-based carrier, which has made a habit of signing big deals at major shows in recent years, this time ordered 42 777s, with options for 20 more. The firm orders are worth nearly US $10 billion at list prices. However, the airline surprised observers by not following this deal with a widely expected order for 50 A350s. This delay will give Boeing renewed hope of winning the midsize sales battle. Emirates’s 777 show order comprised 24 -300ERs, 10 -200LRs and eight freighters, all of which will be powered by GE90 engines. In addition to the airline’s existing backlog, the carrier will eventually have a fleet of 93 777s, which will make it the largest 777 operator in the world. In total, the airline now has a backlog of over 130 widebodies, including its 45 A380s. “We have had very positive results with the Boeing 777s already in our fleet,” said Emirates’s chairman, HH Sheikh Ahmed bin Saeed Al-Maktoum. “These new aeroplanes are perfectly suited to our business model for continued growth, both in cargo and passenger traffic, while maintaining the high level of comfort and exceptional service our passengers expect.” All of the new 777s will be used to expand Emirates’s fleet rather than replacing existing aircraft. As such, the airline will maintain the fleet of six Boeing 747 freighters that it wet leases from Atlas Air, as well as its 10 recently delivered A340-500s. There had been speculation that the airline would replace its four-engined A340s with the twin-engined 777s. “We will still have the A340s as they complement the 777s,” said HH Sheikh Ahmed. The new 777s will enable Emirates to open new long-haul routes, such as to the west coast of the USA and to South America. In terms of onboard facilities, the airline has already ordered first class seating pods from B/E Aerospace, which fitted the pods on Emirates’s A340s. The airline is also reported to be close to signing a deal with AeroMobile for inflight mobile phone call services. Emirates will finance the aircraft purchase through the international money markets, as it has done for previous purchases. The airline will be able to point to the strong first half results that it released last month, which showed a net profit of $251 million, up 7% on the same period in the year before, while looking for the funding. “We have never had a problem financing acquisitions in the past,” said HH Sheikh Ahmed. When Emirates will make its next big order, which should be for around 50 787s or A350s, is now unclear. The airline had been expected to order A350s as far back as the Paris airshow, but it has now delayed its decision, particularly after overtures from Boeing. The main reason why the carrier has delayed its decision is the fact that neither manufacturer has completely specified what it is offering. Airbus is ahead as it has officially launched the A350, but Emirates is still awaiting further details. “I don’t think the A350 is there yet,” Tim Clark, the airline’s president told Reuters. “The A350-900 is not in a state where we can sign on.” Boeing, meanwhile, is talking about launching a stretched version of the Dreamliner, which would meet Emirates’s requirement for an aeroplane that can carry 330 people. “My belief is Boeing will launch a larger version of the 787 and when they do that, there will be considerable interest in the community,” said Clark. And, with Emirates already set to receive at least one aircraft a month for years to come, it has no need to rush into orders for more planes just yet. This is particularly true in the case of A350/787 decision, as it is likely to shape Emirates’s fleet for decades to come. “These [aircraft] will set the baseline for all families of planes on both sides of the Atlantic,” said Clark. Another surprising ‘non-order’ at the airshow was Qatar Airways’s silence about its future fleet plans. The airline announced at Le Bourget plans to order 60 A350s and 20 777s. A letter of intent was subsequently signed for the A350 deal, but the 777 order is yet to be formalised. However, the airline said that the deals are still going ahead, adding that it did not want to be rushed into an order just because of an airshow. “It’s just a matter of dotting the I’s and crossing the T’s,” said a spokesperson.

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