Why Airbus Might Be Unhappy About Emirates’ $16 Billion Plane Order

November 18, 2019, 12:10 PM UTC

Emirates finalized an order for 50 Airbus SE planes, shrinking a tentative commitment made earlier in the year after the Gulf carrier reviewed its fleet strategy and aired concerns about aircraft performance.

Emirates will purchase A350-900 wide-body jets worth $16 billion at list prices, Chairman Sheikh Ahmed Bin Saeed Al Maktoum said Monday at the Dubai Airshow. While that’s up from the 30 it agreed to take in February, the firm deal replaces an outline that also included 40 A330neos valued at $12 billion.

In all, the Airbus order shrank by about $5.5 billion, before factoring in customary discounts. Deliveries of the A350s, equipped with Rolls-Royce Holdings Plc engines, will start in 2023. Emirates could later decide to order some A330neos, and is still in talks with the European manufacturer’s U.S. rival Boeing Co. about 787 Dreamliners, Sheikh Ahmed said.

“The A350s will give us added operational flexibility in terms of capacity, range and deployment,” he said at a press conference. “This follows a thorough review of various aircraft options and of our own fleet plans.”

The announcement comes as the world’s biggest long-haul airline grapples with a slowing regional economy and an early end to production of the A380 superjumbo, of which it’s the biggest operator.

The accord puts Emirates center-stage at the Dubai expo after it seemed that the carrier might fail to strike a deal at a biennial event it traditionally dominates. The breakthrough follows months of negotiations as Tim Clark, the carrier’s president, refused to sign a final agreement without guarantees on the performance of the Rolls-Royce engines.

February’s tentative agreement saw Emirates slash its order for the A380 double-decker by 39 planes to 123. Fewer than 10 of the superjumbos remain to be delivered.

The airline has been mulling its route network and fleet profile since last year in response to slowing growth in the Middle East triggered by lower oil prices, as well the A380’s early demise and a deepening global malaise from escalating trade tensions.

Discussions continue on a separate plan to buy 40 787s, Sheikh Ahmed said. It wasn’t clear whether an older deal for 150 777X jets would be affected.

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