DAE orders 100 Airbus aircraft for $12.6 billion

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DAE orders 100 Airbus aircraft for $12.6 billion

FARNBOROUGH - Dubai Aerospace Enterprise (DAE) confirmed its order with Airbus for the purchase of 100 airplanes valued at $12.6 billion at average list prices. The announcement was made on the second day of the Farnborough International Air Show.

By Mark .t Townsend, Business Editor

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Published: Thu 17 Jul 2008, 12:16 AM

Last updated: Sun 5 Apr 2015, 12:50 PM

The order follows the agreement signed between the two companies at the Dubai Air Show in November 2007 for 70 A320s and 30 A350s XWB with deliveries starting in 2013 and concluding in 2022. The list price of $12.6 billion incorporates an associated deal with Rolls-Royce for the Trent XWB engines to power the A350 XWBs totaling $1.2 billion at list prices.

Commenting on the order Shaikh Ahmed bin Saeed Al Maktoum, Chairman, Emirates Group, said: "This order confirmation underlines our vision and strategy to make DAE a leader in the aircraft leasing market that is able to seize upon the significant aviation growth in the Middle East and other developing markets."

Speaking to Khaleej Times Bob Genise, chief executive officer of DAE Capital said the outlook for DAE remained strong despite the impact on the global aviation industry of record oil prices.

"It is a long term industry, we are a long term participant and we are building a long term future. We have very attractive pricing with what we have negotiated with the manufacturers which will enable us to build our business for the long term."

Aviation analysts at Farnborough have suggested credit quality in the aviation sector is likely to be strained under current conditions, a point acknowledged by Genise, "there will some issues with regard to fuel prices and some airlines will be in serious problems but we are evaluating that and looking at the credit quality of the airlines we are doing business with."

DAE Capital looking at a broad geographical in becoming a top leasing company.

"We will have a broad base and our target is to do about 25 per cent of our business in the Middle East and around 35 per cent in Asia-Pacific and 25-30 per cent in Europe and the rest in the Americas."

Genise also affirmed that DAE will look at all manufacturers when considering future orders adding, "there is no concentration, we try to split our portfolio predicated on what the market says and we will be a diversified owner of aircraft."

Qatar mulls low-cost airline

FARNBOROUGH - The chief executive of Qatar Airways sent a clear message that it may launch a low cost airline if other low-cost carriers erode the market share of Qatar Airways. Speaking at the Farnborough International Air show Akbar Al Baker stated: "if our market share is eroded by low cost carriers or people that have not thought about the low cost model correctly we will launch a low cost carrier within 90 days."

He added that Qatar Airways was prepared for such a development, "we have a registered name, we have aircraft available and we will give a better product, a better service with lower costs as a result of our structure."

The comments were made during a signing of a Memorandum of Understanding for the purchase of up to six Airbus A321 aircraft, four firm orders with an option for a further two.

Akbar Al Baker chief executive of Qatar Airways and Tom Enders, president and chief executive of Airbus, signed the agreement.

The four aircraft are scheduled for delivery in the near term and will be used on regional routes and bring the A321 fleet to 14 aircraft.

With the additional six A321s Qatar Airways narrow body fleet will increase to 27 aircraft consisting of 14 A321s, 11 A320s and 2 A319 long-range aircraft.

"Concluding this deal with Airbus for the additional A321 aircraft will further assist Qatar Airways in the rapid development of its regional network," said Al Baker.

He hinted that further orders for narrow-bodied aircraft might be in the offing. mark_townsend@khaleejtimes.com

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