Dubai Aerospace Enterprise (DAE) yesterday ordered 40 aircraft from the French-Italian manufacturer ATR in a deal worth US$988 million, as the company recovers from its former financial woes.
The order for the ATR 72-600 aircraft, made at the Singapore Airshow, includes a firm order for 20 and options for an additional 20, DAE said.
Deliveries are scheduled between next year and 2018.
The company was founded in 2006. Through its two divisions, it offers aircraft leasing, maintenance, repair and overhaul services to customers around the world.
DAE shareholders include Investment Corporation of Dubai, Dubai International Capital, Dubai Silicon Oasis Authority, Istithmar World and Emaar Properties.
The aircraft leasing company cancelled $5.8 billion worth of orders from Airbus in 2011 as it was forced to dramatically scale back its business after its ambitious growth plans were soured by the global financial downturn.
At the time, DAE reached an agreement with its lenders for a new four-year credit facility. It faced $800m in loans that were about to mature.
DAE now generates annual revenue of about $2bn and holds an aircraft portfolio of about $3.3bn, its website said.
“We aim to diversify our portfolio and expand into regional aircraft to meet an increasing demand from airlines that are developing regional air connectivity,” said Khalifa Al Daboos, DAE’s managing director.
The ATR 72-600 is a twin-engine aircraft that operates on a short-haul network. In recent years it has gained popularity in the region for aircraft below 90 seats. The ATR 72-600 can accommodate between 68 and 74 passengers.
“The low operating cost of the ATR 72-600 makes it a compelling choice for operators that need to offer a differentiated product on short-haul sectors,” Mr Al Daboos said.
Filippo Bagnato, the chief executive of ATR, said: “Our new partnership with DAE will further enhance the visibility of our brand and our products in the Middle East, where we expect to continue developing our presence in the very next years.”
Saj Ahmad, the chief analyst at StrategicAero Research added: “DAE’s order brings diversification of its Airbus/Boeing dominated backlog and the first foray into regional jets.
“The ATR family is a robust seller and will be placed into customer hands quite easily by DAE. Customers in Africa or Europe would be prime candidates – DAE will not be short on takers, especially since this is their first order as far as I can tell since the 2007 Dubai Air Show.
“This might be the start of DAE expanding its portfolio of assets to capture greater market share and reinvigorate its leasing arm.”
Thailand’s Bangkok Airways also ordered six ATR 72-600 at the Singapore Airshow. The six planes are worth about $150m and will be delivered between the end of this year and 2016, AFP reported.
“This is once again a time for growth. With increasing wealth in the Middle East and Asia, there is opportunity for more of the value – like leasing – to be kept in the regions. The Middle East and Asia are still emerging markets for local lessors even though airlines from these regions are well-established,” said Will Horton, a senior analyst at the Sydney-based Centre for Asia Pacific Aviation.