Boeing Snares Huge Jet Order
NOVEMBER 13, 2011, 4:56 P.M. ET
By ALEX DELMAR-MORGAN
online.wsj.com
DUBAI—Emirates Airline kicked off the Dubai Air Show on Sunday with the single largest commercial aircraft order in Boeing Co.'s history, snapping up 50 widebody 777-300s, as the Middle East's largest carrier continues with its aggressive expansion push.
The airline's chairman, Sheik Ahmad bin Saeed Al Maktoum, said the deal is valued at $18 billion and Dubai-based Emirates has options to purchase an additional 20 Boeing 777-300 jetliners. Delivery is set to take place in 2015, he added.
This year has seen Middle East-based carriers such as Emirates, Qatar Airways and Abu Dhabi's Etihad continue with their bold growth strategies by adding routes and bulking up their fleets.
If Emirates exercises options for an additional 20 777-300 extended-range planes, then Sunday's deal is valued at about $26 billion, Sheik Ahmad said, adding the airline was looking at a range of funding options including export credit agencies and Islamic financing to pay for the order.
Media reports in the past few days had speculated that Emirates could buy between 30 and 50 Boeing 777 long-range aircraft valued at $8.5 billion to $14.5 billion based on average Boeing list prices. The average list price of an extended-range Boeing 777-300, according to the company's website, is $298.3 million. The 777-300ER carries 365 passengers and can fly as many as 14,685 kilometers.
Emirates, which earlier in the month posted a 76% plunge in first-half net profit due to a $1 billion rise in fuel costs, now operates a fleet of 95 777s, making it Boeing's most profitable plane.
Sheik Ahmed said Sunday that despite continuing economic turbulence in Europe, the airline is poised for further expansion. U.S. and European airlines have often accused Persian Gulf carriers such as Emirates of receiving unfair government support including cheap fuel and other subsidies, which, they say, allows them to grow quicker.
"The growth will still be there," Sheik Ahmed said. He said the airline's commitment to the Airbus A350 XWB remained after Airbus parent European Aeronautic Defence & Space Co. last week said it is taking a charge of €200 million ($275 million) to cover expected delays in delivering its new twin-jet aircraft.
Regarding the carrier's debt-raising plans, the Emirates chairman said all options are open.
"There's a lot of liquidity in the market," he said.
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