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Abu Dhabi, UAEThursday 20 September 2018

Dubai Aerospace in talks to place multi-billion dollar order for 400 jets

A 400 single-aisle jet order would be worth over $40 billion at list prices

Dubai Aerospace Enterprise is eyeing A320 and 737 Max aircraft as part of its 400 plane order. Courtesy Dubai Aerospace Enterprise
Dubai Aerospace Enterprise is eyeing A320 and 737 Max aircraft as part of its 400 plane order. Courtesy Dubai Aerospace Enterprise

Dubai Aerospace Enterprise, one of the biggest aircraft lessors worldwide, is in discussions with Airbus and Boeing for an order of 400 jets.

State-owned DAE is looking to acquire single-aisle aircraft, including A320-family neos and 737 Maxs, a source familiar with the matter said on Thursday. The order would be worth at least $40 billion at list prices, assuming an even split between both planemakers, though customers often get discounts.

If securing the order becomes difficult because of backlogs at the manufacturers, the “logical alternative” would be for DAE to expand its fleet by acquiring another lessor and gain access to its orderbook, the source said.

“As a leading aircraft manufacturer we are always in discussions on fleet requirements, and as is normal we do not disclose details of these,” an Airbus spokesman said in an emailed statement. Boeing declined to comment.

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The Dubai government-controlled company has a fleet worth $14 billion after acquiring Dublin-based Awas in August, a purchase that propelled DAE into the top ranks of global aircraft lessors and swelled its fleet to nearly 400 planes.

The company is mulling an issuance of a $500 million sukuk and may tap the market either later this year or in 2019, depending on market appetite.

In 2017, DAE raised $2.3bn in senior bonds split across three tranches in the US to fund its acquisition of Awas.

DAE Capital, the leasing arm of Dubai Aerospace Enterprise, formed an asset management unit that will seek to build a $5bn portfolio of assets in the coming years, the company said in January.

The lessor has 111 customers in 55 countries, according to its website. Reuters reported on the talks earlier on Thursday, citing DAE chief executive Firoz Tarapore. Mr Tarapore was not immediately available for comment by phone when the The National tried to contact him.

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