x Abu Dhabi, UAESaturday 20 January 2018

Jet leasing firm DAE cuts orders further

Dubai Aerospace Enterprise scales back its purchase orders for Boeing jumbo jet freighters.

The massive top cargo bay of a Boeing 777F. AFP
The massive top cargo bay of a Boeing 777F. AFP

Dubai Aerospace Enterprise (DAE) has scaled back its purchase orders for Boeing jumbo jet freighters, opting for fewer, smaller airplanes.

The Dubai company, which leases out aircraft, has switched five of its 15 orders for the 747-8 to the 777, with the five new airplanes to be leased to Emirates Airline, Bloomberg News reported.

"We are constantly working with our customers to evaluate how to best suit their needs," Jim Proulx, a spokesman for Boeing, told Bloomberg News.

Representatives of DAE could not be reached for comment. The changes leave DAE with 10 747-8 freighters and 10 777s still on order.

DAE made a splash in 2006 when it was introduced as a $15 billion (Dh55.09bn) aircraft leasing and services company to complement Dubai's airport development plans. It placed a blockbuster aircraft order at the 2007 Dubai Airshow, committing to buy 200 aircraft from Boeing and Airbus for tens of billions of dollars.

But as the economic downturn persisted, conditions became increasingly difficult in the aircraft leasing business and DAE cancelled most of its orders. Today, DAE's client list includes Emirates Airline, easyJet, Virgin Australia Airlines and Kingfisher Airlines.

Last year, the company cancelled orders for 25 Boeing aircraft, including 15 787s. This year, the company was reported to have cancelled all of its Airbus orders.

Boeing began deliveries of the 747-8 freighter last month after two years of delays.

The aircraft costs about $333 million at list price, although airlines are believed to receive discounts. The smaller 777s are listed at $280m.

DAE in July secured a four-year, $800m credit facility to meet short-term needs.

The company's total publicly disclosed debt as of July was about $2.7bn, according to Bloomberg News figures.