Airbus SAS and Boeing Co. secured record orders on the first day of the Dubai Air Show, with Emirates accounting for the bulk of purchases as it signed deals valued at more than $100 billion for wide-body aircraft.
Boeing took an early lead in the biennial expo, signing up Etihad Airways PJSC for its new 777X wide-body as well as for more 787 Dreamliners. Emirates followed with a purchase of 150 777X valued at about $76 billion, plus an option to buy 50 more. Airbus then confirmed a deal with the largest Middle East airline for 50 A380 super-jumbos valued at $23 billion.
“We see that demand for aviation services will continue to grow globally,” Emirates Chief Executive Officer Sheikh Ahmed bin Saeed Al-Maktoum said at a press conference Sunday.
The opening day of the show reasserts the Middle East’s position as the growth engine in the global aviation industry. Qatar Airways Ltd. joined the order rush with a purchase of 50 777X airliners, while low-cost carrier FlyDubai agreed to buy 100 737 Max, Boeing’s biggest deal in the region for the upgraded single-aisle jetliner. Even before Sunday, Emirates was already the largest operator of the current 777 and the A380.
Etihad, whose transaction with Boeing is valued at $25.2 billion, will become the premiere operator of the Dreamliner, with 71 in total on its order book, and CEO James Hogan said he may have more orders to present at the event. In total, Hogan ordered 72 Boeing aircraft Sunday, including a 777 freighter.
Hogan later unveiled a second order, this time with Airbus valued at almost $27 billion, including for 50 A350 wide-body aircraft as well as 36 single-aisle A320 family jetliners. Of the 40 A350-900 that Etihad agreed to buy, 24 are regional models due from 2018, Hogan said.
Three of the four first customers for the 777X are from the Middle East, with Deutsche Lufthansa AG the only exception for a combined 259 orders and commitments. The aircraft was formally introduced Sunday, including its list price. The larger 777X-9, due 2020, will cost $377.2 million and the smaller 777X-8 debuting 18 months later is priced at $349.8 million. Customers typically buy aircraft at discount. Production will start in 2017, Boeing said.
The 777X boasts new General Electric Co. engines and Boeing’s largest-ever wing that comes with a fold to conserve airport space. The plane is slated to enter service by decade’s end as the first twin-engine jet to haul a jumbo’s payload. The 777 program is central to Boeing’s efforts to maintain its lead in the lucrative wide-body market and fend off Airbus, which is positioning its largest A350 as a competing model.
For Airbus, the A380 transaction is a record. The double-decker aircraft was at risk of ending 2013 without a deal after Lufthansa shelved three orders. Instead, Airbus can now make the year the most successful for its super-jumbo should leasing company Doric firm up its plan to buy 20 units.
Airbus CEO Fabrice Bregier said the Emirates deal supports the program and will help avoid production cuts that may have become necessary should the order dearth have continued. Airbus still has “a handful” of open A380 slots for 2015, with Emirates only due to take its latest batch from early in 2016.
Emirates now has total orders for 140 A380s and had taken delivery of 38 by the end of October. Emirates President Tim Clark said the aircraft is full on high-density routes such as Dubai-Heathrow, and that some will replace aging A380 models. The 777X will also rejuvenate the existing 777 fleet eventually.
“You keep on growing until you find a line where you get to the tipping point,” Clark said in an interview after announcing the deals. “So far we haven’t seen that.”
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