Dubai wants guar­an­tee on A380 out­put be­fore plac­ing new or­der

Arab News - - BUSINESS -

Dhabi’s Eti­had re­ported losses in 2016 of $1.9 bil­lion.

But the fi­nan­cial pain has not been re­stricted to the Ara­bian Gulf’s big three car­ri­ers.

Dubai-based Fly­dubai, a sis­ter com­pany of Emi­rates and with a bud­get model sim­i­lar to that of Air Ara­bia, lost more than $38 mil­lion in the first half of the year — weighed down by fall­ing yields and ris­ing costs.

Emi­rates and Fly­dubai this sum­mer said they would in­te­grate some of their op­er­a­tions in a bid to save costs and mop up ex­cess ca­pac­ity on both of their net­works.

The po­lit­i­cal feud be­tween Qatar and four of its Arab neigh­bors has also hit the avi­a­tion sec­tor, with some air­lines, in­clud­ing Air Ara­bia, be­ing forced to stop flights to Doha.

But de­spite such eco­nomic and geopo­lit­i­cal head­winds, Air Ara­bia has main­tained rel­a­tively sta­ble seat loads.

“For the last 14 years, we seem to have been en­joy­ing av­er­age year­round 80 per­cent seat fac­tors and that has not changed,” said Ali.

The car­rier cur­rently serves over 133 routes from five re­gional hubs, in­clud­ing two in the UAE (Shar­jah and Ras Al-Khaimah).

The A321­neo is con­sid­ered the long­est-range sin­gle-aisle pas­sen­ger jet cur­rently on the mar­ket — an im­por­tant con­sid­er­a­tion for bud­get car­ri­ers based in the re­gion look­ing to ex­tend their route net­works into Africa, Asia and Eu­rope.

It is the first time Air Ara­bia has added newer A320 mod­els to its al­lAir­bus fleet.

The A321­neo, which has an ex­panded ca­pac­ity of 215 seats, will join the car­rier’s ex­ist­ing fleet of 50 A320 air­craft, start­ing in 2019. DUBAI: Dubai wants a guar­an­tee that Air­bus will keep pro­duc­tion of the A380 su­per­jumbo open for at least 10 years be­fore sta­te­owned Emi­rates places a new or­der for the world’s largest jet­liner, the air­line’s pres­i­dent said on Mon­day.

Speak­ing to Reuters at the Dubai Air­show, Tim Clark also said the largest Mid­dle East car­rier would prob­a­bly stick with the Boe­ing 787 for its mid-sized fleet needs af­ter or­der­ing 40 of the jets on Sun­day, and could or­der more in fu­ture.

Air­bus’s hopes of a new or­der from lead­ing cus­tomer Emi­rates for the slow-sell­ing A380 were thwarted on Sun­day when the air­line un­veiled a sur­prise or­der for 40 Boe­ing 787-10 jets worth $15.1 bil­lion at list prices, but no Euro­pean con­tract.

Del­e­gates said ne­go­ti­a­tions con­tin­ued overnight and that Air­bus may be will­ing to meet Dubai’s con­di­tions in or­der to se­cure a much-needed or­der for its flag­ship prod­uct.

“We con­tinue to have a di­a­logue with them,” Clark told Reuters.

“If that comes to some kind of fruition dur­ing the course of the week, or the next few months, is very much down to them.”

Air­bus has been scal­ing back pro­duc­tion plans for the A380, which was launched as the so­lu­tion to ever-ris­ing air travel be­tween ma­jor in­ter­na­tional hubs but has been out­flanked by im­prove­ments in the ef­fi­ciency of smaller jets.

With 100 A380s al­ready in Emi­rates’ fleet, Clark made plain the con­cerns about Air­bus’ com­mit­ment to the project were be­ing felt as high as the Dubai gov­ern­ment, which owns the air­line.

“I think the own­er­ship here are con­cerned about con­tin­u­a­tion (of the A380). They need some cop­per-bot­tom guar­an­tees that if we do buy some more, then the line will be con­tin­ued for a min­i­mum pe­riod of years and that they are fully aware of the con­se­quences of can­ce­la­tion and leav­ing us high and dry.”

“Those as­sur­ances I am sure will come. Quite when, I don’t quite know.”

Asked what would be a rea­son­able com­mit­ment to un­block a deal, he said: “A min­i­mum 10 years. These are vast cap­i­tal in­vest­ments for us and we can’t af­ford to have any­thing less than 10 years; hope­fully it would be 15. But it is their call.”

Air­bus de­clined to com­ment.

Air Ara­bia said on Mon­day it had signed leases for six Air­bus A321­neo air­craft with Los An­ge­les-based Air Lease Corp. (Air Ara­bia)

Newspapers in English

Newspapers from Saudi Arabia

© PressReader. All rights reserved.