DUBAI – Emirates airline on Sunday made the 12th edition of the Dubai Airshow, the biggest ever biennial aviation gathering, more bigger as the carrier placed a huge order for 50 Boeing 777s worth $18 billion (Dh66 billion, which is the single biggest order in almost 100 years history of the US airplane maker.
The agreement was signed in the presence of His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.
The airline also announced an option to buy another 20 777s as part of the order and that would push the deal’s total value to $26 billion (Dh95.4 billion).
“The Boeing 777-300 ER aircraft plays a pivotal role in Emirates development of a modern fleet to meet the demand for global air travel for the future,” said Emirates Airline and Group Chairman and Chief Executive Shaikh Ahmed bin Saeed Al Maktoum after signing the agreement with Boeing Commercial Airplanes president and chief executive officer Jim Albaugh.
The new agreement further establishes Emirates as Boeing’s best customer for the 777 as the Dubai-based airline already has 95 777s in service and already another 40 on the order books.
“The 777 has really served Emirates very well in terms of the seat cost, especially when we see that the fuel price today is very high,” Shaik Ahmed told reporters.
“With 61 777 300-ERs currently in service, this record breaking dollar value order is another milestone for Emirates and affirms our strategy to expand our long haul destinations and continue to excel as a world leading carrier, connecting the world to Dubai and beyond,” he added.
An analyst termed the deal timely and said the airline needs more aircraft to enhance its capacity and A350 delay is also another reason.
“The order is two parts reflection. Firstly its as a result of A350 delays and Emirates needs something…. to grow business. And I think the second key point to remember is that Emirates has a lot of ageing aircraft and they are going to withdraw from the fleet in the next five to 10 years. They need something to replace and 777 is better option,” FBE Aerospace founder and chief analyst Saj Ahmad told Khaleej Times at the airshow.
Shaik Ahmed said the airline’s decision to place new order for 777s has nothing to do with the delays on the A350. “It’s part of the Emirates expansion. We always find new markets,” he added.
In addition to new 777s orders from Boeing, the carrier has 73 Airbus A380 superjumbos on order, as well as 70 Airbus A350s. The airline is the largest single customer of Airbus’ long-haul airliner A380 with a purchase list of 90 units.
The airline is financially strong enough to fund the purchase of new aircraft as part of ongoing expansion plans by one of the world’s fastest growing airlines, Shaikh Ahmed told reporters.
The airline chief said he expects better results by the group in the second half of this year despite the global slowdown.
Earlier this month, Emirates President Tim Clark indicated that the carrier was looking at the more resilient Islamic finance market to fund aircraft deliveries as international banks back out of plane deals because of the eurozone debt crisis, Reuters reported.
European lenders, especially French banks, which have been major financiers for Emirates’ aircraft deals with Airbus and Boeing, have become risk-averse because of the crisis, Clark said.
“We were kind of planning for finance from European banks… but it’s just a bit difficult now,” said Clark. “We still have the Islamic finance market to go with and other funding options are always open for us,” he said, adding that issuing an Islamic bond or sukuk was “not out of the question.”
The signing was also witnessed by Emirates airline senior executives; Tim Clark, President, Emirates airline and Adel Al Redha, Emirates Executive Vice-President, Engineering and Operations as well as David Joyce, President and Chief Executive Officer of GE Aviation, whose GE 90-115B engine will power the 777-300 ER aircraft.
“This is an extremely proud moment for us as it not only underscores Emirates’ on going confidence in the 777 but also makes this the single largest order in dollar value in Boeing’s history,” said Albaugh from Boeing.
The 777-300ER will be operated in a three-class configuration with eight First Class suites, 42 Business Class seats and 310 Economy Class seats and offers an additional cargo payload of 20.1 tonnes.
“As the largest operator of the 777 in the world, Emirates has played an important role in development of the airplane and its input over the years has been invaluable in the development of the 777 programme,” he added.
“Today’s 777-300 ER order gives Emirates the ability to replace some of our older existing aircraft allowing us to maintain our leadership in fuel efficiency as well as providing our customers with an updated superior product,” said Clark.