Emirates to decide on Boeing or Airbus multibillion dollar order

Emirates, the largest operator of wide-body aircraft globally, will decide by year end on a multi billion dollar order in which the airline will pick between Boeing’s Dreamliner 787 model or Airbus’ competing A350, the carrier’s chairman said. “Until now we have not taken a decision on which plane model,” Sheikh Ahmed bin Saeed Al Maktoum said in an interview with The National. “It’s still under study. After we’ve done our review we’ll make an announcement by end of the year.” The decision between the two aircraft models reignites a fierce battle that played out in the run-up to the Dubai Air Show in 2007 when Emirates placed a US$31 billion order that included 70 A350s rather than the 787. Since then it has rolled back on its commitment to the A350 following a review of its fleet requirements.

Emirates, like most airlines, conducts a review of its fleet as it looks to retire planes and introduce new models in line with its business objectives. Those decisions are influenced by yields and margins, which have come under pressure as a result of a downturn in the travel industry amid terrorist attacks in Europe and a more competitive operating environment where low-cost carriers are deploying narrow-body planes on long-haul routes. In June, Bloomberg reported that Emirates was in talks to buy 20 A380s in a deal worth about $8.7bn, according to list prices before discount. An order of 20 Boeing 787 Dreamliner planes is valued at about $5.4bn according to list prices, while an order for 20 Airbus A350s is worth about $6.3bn.

Both Sheikh Ahmed and the Emirates president Tim Clark have declined to provide further details about the size of any future aircraft order. However, Boeing’s order book, as of July 4, lists an order for 30 787 planes from unidentified customer(s), at a value of $8.1bn. In 2014, Emirates cancelled its order for the 70 A350 – valued at $16bn – which makes the chances of a repeat order potentially unlikely. Moreover, the expanded partnership agreement Emirates announced with the low-cost carrier flydubai last month will pave the way for greater network integration and crossover of passengers out of their joint hub at Dubai International Airport.

The flydubai low-cost model, which relies on single-aisle planes, allows penetration and connectivity of markets that complement the wide grid of Emirates. The closer integration means promoting a seamless form of co-operation between the two companies that either does not currently exist or is fragmented. “The 787 is the favourite as it stands,” said Will Horton, senior analyst at the Centre for Aviation (Capa). “A 787 order could possibly be made in conjunction with flydubai’s 737 fleet if any amendments are needed.” In an interview with The National last month Mr Clark said […]

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