Etihad Airways kicks off order spree with $25 billion Boeing deal
Dubai: Abu Dhabi`s Etihad Airways placed a USD 25.2 billion aircraft order with Boeing on Sunday, kicking off a Dubai Airshow expected to be dominated by the formal launch of Boeing`s newest airplane and fresh demand for the world`s largest passenger jet.
Sheikhs and ruling family members of Dubai and neighbouring Abu Dhabi toured rows of passenger jets and arms pavilions as a sandstorm blotted the skies over a new 645,000 square metre facility, built to showcase the Middle East`s largest aviation hub.
Gulf airlines are competing with each other for a share of traffic flooding through the region, due to its strategic location between East and West, and squabbled behind the scenes over the order of announcements for up to 400 new planes expected to be worth over USD 100 billion at list prices.
Abu Dhabi`s Etihad Airways started the spending spree with an order for 56 Boeing airplanes, including 25 of its new 777X mini jumbos and 30 787 Dreamliners.
But domestic rival Emirates looked set to dominate the event with orders for as many as 150 of the long-haul planes coupled with a repeat order for the Airbus A380 superjumbo.
"We will order A380s," Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Dubai-based airline, told Reuters.
He added that the carrier`s order value at the show would exceed its order of $18 billion at the last such event in 2011.
The birth of a revamped successor to Boeing`s 777 jet, with some 250 orders from four airlines, marks a new step in the growth of Gulf airlines and a fierce contest between Boeing and Airbus for their business.
Boeing is expected to launch the 777X jet with orders from the top three Gulf carriers -- Emirates, Etihad Airways and Qatar Airways -- and Germany`s Lufthansa which has already tentatively committed to buy 34 of the planes.
A fifth, Hong Kong`s Cathay Pacific, could join the programme later, industry experts said, while British Airways has expressed interest in the jet.
Boeing`s top planemaking official pledged not to let a dispute with Seattle assembly workers over where the plane should be built interfere with its launch, which is expected to be announced on day one of the November 17-21 show.
Boeing is looking for a home for the new jet after members of the International Association of Machinists rejected a proposed contract that would have seen Boeing commit to keeping the latest member of the 777 series near Seattle in exchange for restructured benefits.
Airbus, which has a record of springing surprises at air shows, is keen to prevent a smooth lift-off for the 777X and is negotiating deals for all sizes of its jets including the A380.
"Airbus is desperate to blunt the impact of the 777X," said a senior industry source, speaking on condition of anonymity.
The event presents a personal challenge for combative Airbus sales chief John Leahy, a New Yorker who is keen to avoid a rare defeat at an air show in his 20th year in the job.
Leahy is under pressure to revive the fortunes of the A380, which has so far found no buyers this year and faces a cut in production unless empty 2015 production slots can be filled.
Emirates has frequently said it would add another 30 aircraft to its existing order for 90 superjumbos once it resolves capacity constraints in its hub.
An industry source said Emirates was in talks to order another 20-25 A380s but that this could rise. A second industry source said Emirates could place a record order for as many as 50 jets, in a deal worth over USD 20 billion at list prices.
US AIRLINE WARNING
Boeing`s 777X comes in two models including what will be the world`s longest-distance passenger jet, a 350-seat model to be known as the 777-8 once the aircraft has been launched.
The larger 777-9 edition, carrying 406 people, will be the main version and be delivered starting 2020.
Together, the modernized planes call for development of carbon-fibre wings that fold at the tips to fit in the same parking spaces and new engines from General Electric .
Airbus says Boeing has packed in passengers densely to make the revamped aircraft`s economics work against its own all-new 350-seat model, the A350-1000, due to enter service in 2017.
It has launched a campaign for a minimum standard seat width of 18 inches on long trips, aiming to draw attention to what it says will be the 777`s narrower seats.
Some airlines have told Airbus that this is their decision and Boeing says many Airbus jets have similar seats.
A group representing US airline pilots meanwhile warned that the sale of hundreds of planes to Gulf carriers that compete with US carriers would have "serious consequences for the US economy and US airline workers." This would create stiff competition for the US airline industry.
Highlighting defence deals also at stake at the November 17-21 air show, UK Prime Minister David Cameron toured the complex even before the event had started, telling the heads of British aerospace and defence companies to "get out there and win".
Britain is competing with France for a potential 60-plane fighter jet deal with the United Arab Emirates.