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Business Home > Nation
New flydubai order to top $5b

Abdul Basit / 19 February 2013

Flydubai’s fresh 50-aircraft order may cross the $5 billion mark and the deal is expected to be signed during the forthcoming Dubai Air Show 2013.

Last week, flydubai chairman Shaikh Ahmed bin Saeed Al Maktoum confirmed that the low-cost carrier is talking to Airbus and Boeing for a 50 aircraft order.

Shaikh Ahmed, who is also President of the Dubai Civil Aviation Authority, Chairman of Emirates airline and Chief Executive of the Emirates Group, also indicated that the agreement is expected to be signed during this year’s Dubai Air Show, which will be held for the first time at Dubai World Central’s Al Maktoum International Airport from November 17-21.

In 2011, Emirates wrote its name in Boeing’s 95-year history when it placed the single largest commercial aircraft order of 50 Boeing 777-300ER aircraft, plus options for an additional 20, with a value of $26 billion on the first day of the biannual Dubai Air Show.

It looks 100 per cent confirmed that the order will be signed at the Dubai Air Show because it is home territory and also because the show will be at a new venue, according to a senior aviation analyst.

Talking about financing options for the new aircraft order, Shaikh Ahmed said the airline will use its own cash, export-import bank facilities and lease-back options to finance new aircraft. The budget carrier said it has raised $1.2 billion in competitive financing to fund aircraft acquisition to date.

Ghaith Al Ghaith, the CEO of flydubai, has previously expressed interest in Boeing’s new 737 MAX as well as the fuel-efficient Airbus A320neo. List prices for Boeing’s 737 Max 8 is $100.5 million and $107.3 million for the Max 9. The Airbus A320neo’s catalogue price is below $100 million.

“Based on current list prices, flydubai would be looking at a deal worth around $5 billion,” Saj Ahmad, chief analyst at London-based StrategicAero Research, told          Khaleej Times. “Obviously any deal would deliver discounts as well, but the headline figure for the airplane would be around that much.”

Flydubai, which launched operations in 2009, placed an order for 50 Boeing 737-800 aircraft in 2008, all of which are expected to be delivered by 2016. The airline currently has a fleet of 28 Boeing aircraft and six more deliveries are expected in 2013.

The 737MAX doesn’t enter service until the third quarter of 2017, Ahmad said, adding that flydubai’s deliveries of its current 737-800 order end in 2016 so that leaves a large gap between the two. “I believe that any new order will comprise existing 737-800s or 737-900ERs to bridge the gap between 2016 and 2017 so that the airline can still grow and induct new jets until such time the 737MAX arrives.”

“Airbus is heavily sold out on the A320neo until well into 2021, so it’s unlikely flydubai will buy from them. Another important reason is that Boeing has a lot more capacity to cater for flydubai’s new airplane needs,” he added.



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