Emirates $9bn deal beats expectations
Farnborough // Emirates Airline trumped expectations with an order for 30 long-range Boeing 777 jets at the Farnborough International Airshow in a deal worth US$9.1 billion (Dh33.42bn). The move brings its buying spree this year to $25bn at a time when many other airlines have been hit hard by the global downturn.
Emirates also announced yesterday it had signed a contract for Engine Alliance GP7200 engines to power the 32 Airbus A380 aircraft it ordered last month at the Berlin Air Show. The deal with Engine Alliance, a joint venture between GE and Pratt & Whitney, was worth $4.8bn, while last month's Airbus A380 order was worth $11.5bn. The orders see Emirates firmly place its stamp on the future of global air travel, having become the world's largest airline by international seating capacity last year. Before the show, industry executives had expected Emirates to order 20 of the wide-body aircraft.
The signing ceremonies saw Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, making a rare appearance at the air show. "We made the order because we are short of capacity all the time," said Sir Maurice Flanagan, the founding chief executive and current executive vice chairman of Emirates Airline. "We'd like to go to Kiev, St Petersburg and Chicago, and we've got traffic rights for over 80 flights a week into Australia but we are only operating 70. We need more and more capacity."
Emirates now flies to 103 destinations in 63 countries with a fleet of 150 aircraft. In addition to the order placed yesterday, Emirates has 79 Airbus A380s, 70 Airbus A350s and seven Boeing freighters on order, totalling more than 200 wide-body aircraft worth more than $67bn. Over the next decade, the airline is expected to double its destinations to more than 200 and also double its workforce, from 40,000 to 80,000.
The rapid growth has raised concerns by other airlines fearful of losing their home markets, particularly in Canada and Germany where Air Canada and Lufthansa have successfully lobbied to block or delay Emirates receiving further traffic rights. Most recently, India has raised concerns about allowing foreign airlines such as Emirates the right to operate the A380 superjumbo in its airports, in a bid to protect domestic airlines.
Emirates was founded in 1985 and made a profit in its first year. In 1996, it received the first of its Boeing 777s, which helped it fly ultra-long haul flights and connect virtually all of the world's centres from its base in Dubai. The airline is the world's largest operator of 777s and the only one to have bought every version of the plane. The 1996 order was also hugely influential for Boeing's expansion into the Middle East, after the aircraft maker's rival Airbus took an early dominant role.
"Emirates has played an important role in the 777's success with its significant support of the programme and valuable feedback over the years," Jim Albaugh, the president and chief executive of Boeing Commercial Airplanes, said yesterday. email@example.com
Updated: July 19, 2010 04:00 AM