UAE airlines aiming high, may place orders up to $90b

The UAE’s four fast growing airlines are expected to announce new aircraft orders worth a total of between $75 and $90 billion at the Dubai Airshow opening next month.

The Dubai-based Emirates airline, which is said to be in talks with Boeing for its 777X new-generation aircraft, and also with Airbus for ordering more of its A380, will account for bulk of the orders with an estimated value of above $50 billion.

Etihad Airways is also in negotiations with the US aircraft manufacturer for a multibillion-dollar order for at least 25 of the revamped 777X aircraft that is on track to make its debut in 2020 for its launch customer Lufthansa, which has confirmed orders for 34 of these min-jumbos for a value of $11 billion. The Abu Dhabi-based airline is also expected to place an order for 30 more Boeing’s 787 Dreamliner aircraft

Dubai’s first low-cost carrier flydubai is also likely to execute an order for 50 Boeing 737s Max worth approximately $5 billion to ensure it augments its growth with adequate capacity to meet demand needs.

Air Arabia, the region’s fastest growing budget airline, is also in talks for ordering $4 billion worth of A320 aircraft.

Emirates airline’s chief executive Tim Clark was quoted as saying that the airline would make “a substantive order for the new 777.”

Financial Times newspaper quoted Clark as also saying that Dubai-based carrier is in a relatively advanced stage of commercial negotiations for the new generation 777X that would replace the Emirates Boeing 777 fleet.

According to analysts, Emirates may require between 100 and 175 777X aircraft valued at over $30 billion. The airline is considering buying both of the planned 777X models — the 777-8X, which will carry 350 passengers, and the 777-9X, which will have 400-plus seats. The list price of the new 777 is around $400 million.

Emirates, which have placed orders for 90 A380s so far, is also considering to buy more long-range aircraft from Airbus, including the superjumbos and the largest version of A350 jet. Clark was quoted as saying that Emirates has a longstanding interest in buying another 20 A380 superjumbos.

Saj Ahmad, chief analyst at London-based StrategicAero Research, told Khaleej Times that it was likely that Emirates would hold true to its desire to launch the 777-8X and 777-9X families as a replacement for its current 777-300ER jets, which forms the backbone of its fleet.

“Assuming Emirates buys around 100 777Xs, the value could be up to $40 billion. 
If it goes above that in terms of jets ordered, then the deal could top $50 billion,” Ahmad said.

Ahmad said all indications at present suggested that the bulk of the 777X order would be in favour of the bigger 777-9X. “If Emirates orders 100 jets, then perhaps as many as 70-80 of these could well be for the 777-9X. In effect, the size of the 777-9X purchase renders future A380 buys as pointless — if only because the A380 is older, has less fuel efficiency and cannot carry as much cargo and passengers together like the 777-9X can.”

He observed that Emirates is buying for the future. “These new 777Xs will replace the existing fleet and also complement Emirates’ current growth plans. And you have to remember that these deliveries will happen over ten or more years, so its not like they are inducting them all in one go.” — issacjohn@khaleejtimes.com