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Dubai airline Emirates orders 90 Boeing 777Xs and 5 more 787s
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FlyDubai airline orders 30 Boeing 787s
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Airbus announces agreement in principle with Turkish Airlines
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Airbus still awaiting potential order from Emirates for A350
(Added Boeing shares to paragraphs 8-9, Royal Jordanian) by Tim Hepher, Alexander Cornwell and Pesha Magid
Dubai airlines threw down the gauntlet to their emerging regional rivals with more than $50 billion in orders for Boeing jets on Monday, as competition intensifies to secure dwindling reserves of long-haul jets and to anticipate the growth of international travel.
Government carrier Emirates and its sister airline flyDubai secured 125 Boeing BA.N wide-bodies at the opening of the Dubai Airshow, but left European planemaker Airbus AIR.PA waiting for an A350 order , a largely similar device.
The orders included 55 400-seat Boeing 777-9s and 35 smaller Boeing 777-8s, providing a boost to the overall program known as the 777X, which has been five years behind schedule.
Emirates has also ordered five additional 787 Dreamliners, while flyDubai has ordered 30 of the same type, its first ever order for long-haul aircraft.
“These orders represent significant investments that reflect Dubai’s commitment to the future of aviation,” said Emirates and flyDubai Chairman Sheikh Ahmed bin Saeed Al Maktoum.
He added that Emirates plans to receive the 777X in 2025, which is Boeing’s latest target.
The aviation and tourism sectors are vital to Dubai’s economy, which lacks the oil wealth of many neighboring states.
In New York, Boeing shares rose 4.4% after the orders, which also include 45 737 MAX narrow-body planes for German-Turkish airline SunExpress.
Stocks were also supported by a Bloomberg report that talks this week between U.S. President Joe Biden and Chinese President Xi Jinping could end a prolonged freeze on 737 purchases by China.
Medium-haul aircraft such as the 737 MAX and the competing Airbus A32neo are driving profits for aircraft manufacturers and suppliers globally.
But it is the Gulf that is the largest customer for wide-body aircraft, due to the favorable geography of its hubs in the United Arab Emirates and Qatar.
Industry officials said the latest orders raise the stakes as Saudi Arabia seeks to establish its own footprint and Turkey and India develop plans to attract connecting traffic outside the Gulf.
“They (Dubai) are saying we are the big elephant in the room (and) demonstrating that they are an important player,” said Air Lease Corp AL.N Executive Chairman Steven F. Udvar-Hazy.
Industry officials estimate that airlines around the world are in talks to buy 700 to 800 new planes, including 200 to 300 widebodies, to make up for replacement plans shelved during the pandemic.
But Mr Udvar-Hazy questions whether there is room for all the capacity being explored simultaneously by the region’s carriers. “They are fighting for the same passengers,” he told Reuters.
Turkish Airlines (THY) THYAO.IS burst onto the trade show agenda on Saturday with the announcement by state-run Anadolu news agency that it was in talks to buy up to 355 Airbus jets.
That sparked preparations for a high-profile announcement at the air show on Monday and again on Tuesday, as a Middle East source predicted “bold action” in the Gulf rivals’ backyard.
In an unusual statement, Airbus said it had reached an agreement “in principle” on a large THY order. But he added that the deal was expected to be ratified in the coming days, which sources said indicates it may no longer be announced at the show.
RESERVATIONS DOWN
Other major orders appear to be in preparation without having been publicly announced in Dubai.
Riyadh Air, Saudi Arabia’s new airline, said it was still in talks with aircraft manufacturers to place an order for narrow-body planes.
Saudia Airlines Group plans to order around 150 narrow-body aircraft for Saudia Airline and low-cost carrier Flyadeal, the group’s vice president for fleet management told Asharq TV.
Saudi Arabia established Riyadh Air as part of its plans to transform the kingdom into a major aviation hub.
With many jets not expected to be delivered until 2030 and remain in the skies for two decades, airlines are betting on long-term demand from future travelers, many of whom are not yet born.
But the show recalled the war between Israel and Hamas in Gaza, which is driving up demand for weapons and closing airspace.
Ordering six Boeing 787s, the chief executive of Royal Jordanian ( ) said the airline was seeing declining traffic and was forced to operate longer routes due to the war in the neighborhood.
“There is enough statistical evidence, at least in the short term, to show that there has been a substantial decline in ticket sales in the region,” said Daniel Silke, director of Cape Town-based Political Futures Consultancy. .
Analysts said the war in Gaza is also likely to boost demand for weapons, adding to the surge over the past 18 months when the United States and its allies rearmed Ukraine against the Russia. However, few major arms contracts were expected at the show.
In one hall, the stands of Israeli arms companies Israel Aerospace Industries (IAI) and Rafael Advanced Defense Systems were empty.