Dubai Aerospace Enterprise's latest cancellations bring the total value of aircraft orders it has cancelled to more than $10 billion - with video.
Dubai Aerospace Enterprise cancels plane orders
Dubai Aerospace Enterprise (DAE)has cancelled more orders for Boeing aircraft, bringing the total value of aircraft orders it has cancelled to more than US$10 billion (Dh36.73bn).
The Dubai aircraft leaser has recently abandoned plans to buy 32 Boeing 737 jets, valued at about $2.3bn at list prices, according to updates on the US manufacturer's orders website. Last year, DAE cancelled plans to buy 50 jets from Boeing and Airbus worth about $8bn before standard industry discounts. Those included Boeing 787 Dreamliners and 777-300s, as well as Airbus A320s and A350-900s.
DAE has not publicly commented on the cancellations, which stem from orders made during the 2007 Dubai Airshow for more than 200 new aircraft from the world's two largest aviation firms.
DAE was set up in 2006, entering the leasing market during the peak of an air-travel boom, with the aim of becoming one of the world's biggest leasers of aircraft. The orders were made when the company was in the middle of an expansion phase and was said to have $15bn of backing.
"It would be inappropriate for Boeing to comment on the details of our agreements with customers," said Marc Birtel, a spokesman for Boeing in Seattle, where the company's commercial operations are based.
Saj Ahmad, an analyst and blogger at FBE Aerospace, said other orders on DAE's books were also under threat. "There is still the chance that a number of Boeing 747-8Fs, Airbus A320s and Airbus A350XWBs could also be dropped, either partially or wholly," he said. "A smaller DAE allows a better opportunity to strengthen its operations and free up its capital."
Mr Ahmad said the aircraft leasing market was becoming more competitive. "While a number of lessors have made big buys in the last couple of years so, too, have airlines that have bought their airplanes directly from the manufacturers."
In 2006, DAE outlined planned investments in six aviation-related sectors but these were reviewed during the global financial crisis. Its academic arm has been shut down and its airport investment division was also closed following an unsuccessful bid in 2007 to buy Auckland Airport, New Zealand's busiest airport, after unexpected resistance from the New Zealand public. It no longer lists manufacturing as one of its target areas.
DAE's engineering division was launched in 2007, the year the company acquired the aviation service providers StandardAero and Landmark Aviation from The Carlyle Group for $1.9bn.
DAE's shareholders are all state-backed Dubai companies: Istithmar World; Emaar Properties; Dubai International Capital; Dubai International Financial Centre; Amlak; and the Dubai Airport Free Zone.
* with Bloomberg