Boeing lands surprise 787 deal
Emirates Airlines contract worth $15.1B; Airbus shut out
The news release was printed, the media invited, the first dignitaries began filing into the room. Such was the scene Sunday, the first day of the Dubai Air Show, when Airbus SE had planned to unveil a keenly awaited lifeline for its A380 super jumbos from the aircraft’s biggest fan: Emirates Airlines.
Instead: nothing. In fact, worse than nothing. An initial delay, not unusual at such major signing ceremonies, gave way to confusion. Bewilderment turned to humiliation when a model aircraft was carried into the briefing room and the gray cloth covering it slipped off — revealing the Boeing Co. logo on its tail.
Out of nowhere, the U.S. planemaker suddenly conquered Room 6 on the upper level of the main exhibition hall, with its representatives taking the stage. Airbus officials who dominated the room on arrival quietly slipped out during the news conference as their rival landed a stinging blow: Emirates committed to buying $15.1 billion of Boeing’s 787-10 Dreamliners. That was similar to the order value that Airbus had planned.
It was a surprise twist in the air show’s first-day choreography and one that marked twin setbacks for the European planemaker. With scant demand from other airlines for the double-decker A380, Airbus is more dependent than ever on Emirates. Boeing’s Dreamliner pact added insult to injury since the Dubai-based carrier had originally ordered 70 Airbus A350 jetliners before pulling out of the deal in 2014 to review its requirements.
“Boeing has scored an absolutely huge victory here. You can’t play it down,” said Saj Ahmad, an analyst at StrategicAero Research in London. “That all the talk was
about the A380 and nothing materializing for Airbus was a bit of a dampener for the opening.”
Airbus shares fell 0.4 percent at 83.36 euros, about $93.07, as of 10:26 a.m. in Paris. The Franco-German planemaker’s shares have climbed 33 percent this year, compared with Boeing’s 68 percent increase.
Emirates said it would buy 40 Dreamliners. A separate 787 order from Azerbaijan Airlines, valued at $1.9 billion, raised Boeing’s first-day tally to $17 billion.
Even with the first-day setback, Airbus has a knack for staging high-profile comebacks at major air shows. Airbus and Emirates declined to comment on the back and forth of the negotiations. But Emirates President Tim Clark made it clear that he wants
more than just discounts to buy more A380s.
“If we order any more, we want to make absolutely sure that the will is there contractually to continue the line for 10 to 15 years,” Clark said at the air show. Airbus “would like to put more aircraft into us and everyone else, but their board may have a view that says ‘If you don’t sell any more, Emirates or no Emirates, we don’t want you to do it’, so we need to see something from them which says ‘We will do this.’”
Emirates is set to order about 36 A380s, according to people familiar with the negotiations — a deal that would carry a list value of about $15.7 billion and would push the order book for the giant jetliner to more than 170.
Earlier this month, Emirates took delivery of the 100th A380, cementing Emirates’ de facto status as the only buyer of Airbus’s biggest and most
The biennial Dubai expo is an important venue for both manufacturers to secure deals for their biggest and most expensive jetliners. Two years ago, orders slowed to just $4 billion, compared with more than $170 billion at the previous event, placed largely by the three major carriers in the region: Emirates, Qatar Airways Ltd. and Etihad Airways PJSC.
The mood was more upbeat at this year’s event, with Clark saying demand remains strong, even for the most expensive seats.
Clark unveiled a new first-class suite that will be featured on its Boeing 777 models and will be gradually rolled out across its entire fleet.
The air show is also a barometer for the region’s economic resilience after slumping earnings at the major carriers and political shocks that include Saudi Arabia’s
recent purge of billionaires and princes and a blockade of Qatar.
Because of the blockade, Qatar Air is absent from the event, which cuts out a prolific buyer of aircraft. Etihad is retrenching after a strategy to buy stakes in ailing airlines across the world backfired and the chief executive officer quit.