Why Airbus Might Be Unhappy About Emirates’ $16 Billion Plane Order
Emirates
finalized an order for 50 Airbus SE planes, shrinking a tentative commitment
made earlier in the year after the Gulf carrier reviewed its fleet strategy and
aired concerns about aircraft performance.
Emirates will purchase A350-900 wide-body jets worth $16
billion at list prices, Chairman Sheikh Ahmed Bin Saeed Al Maktoum said
Monday at the Dubai Airshow. While that’s up from the 30 it agreed to take in
February, the firm deal replaces an outline that also included 40 A330neos
valued at $12 billion.
In all, the Airbus order shrank by about $5.5 billion,
before factoring in customary discounts. Deliveries of the A350s, equipped with
Rolls-Royce Holdings Plc engines will start in 2023. Emirates could later
decide to order some A330neos and is still in talks with the European
manufacturer’s U.S. rival Boeing Co. about 787
Dreamliners, Sheikh Ahmed said.
“The A350s will give us added operational flexibility in
terms of capacity, range and deployment,” he said at
a press conference. “This follows a thorough review of various
aircraft options and of our own fleet plans.”
The announcement comes as the world’s biggest long-haul
airline grapples with a slowing regional economy and an early end to production
of the A380 superjumbo, of which it’s the biggest operator.
The
accord puts Emirates centre-stage at the Dubai expo after it seemed that the
carrier might fail to strike a deal at a biennial event it traditionally
dominates. The breakthrough follows months of negotiations as Tim Clark, the
carrier’s president refused to sign a final agreement without guarantees on
the performance of the Rolls-Royce engines.
February’s tentative agreement saw Emirates slash its
order for the A380 double-decker by 39 planes to 123. Fewer than 10 of the
superjumbos remain to be delivered.
The airline has been mulling its route network and fleet
profile since last year in response to slowing growth in the Middle East
triggered by lower oil prices, as well the A380’s early demise and a deepening
global malaise from escalating trade tensions.
Discussions continue on a separate plan to buy 40 787s,
Sheikh Ahmed said. It wasn’t clear whether an older deal for 150 777X jets
would be affected.
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