- Emirates suggested it was reexamining its outstanding aircraft orders as the coronavirus pandemic wreaks havoc on the airline industry.
- This could be particularly bad news for Boeing — Emirates is the largest customer for Boeing’s newest plane, the 777X.
- Emirates, the launch customer for the plane, has at least 115 on order, with options for 11 more.
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Emirates said this week that it may not be able to commit to its slate of airplane orders, creating a new concern for Boeing as it works to bring its newest plane to the skies.
At an online forum Monday, Tim Clark, the president of the Dubai-based airline, suggested the company was reconsidering its open-order book.
“All bets are off,” Clark said, according to Bloomberg. “We are nowhere near confident enough that the economics, the cash flows, the bottom line will put us in a good position to be able to guess if we’ll buy a hundred of this or a hundred of that.”
Clark said airline manufacturers understood that airlines must “keep cash where it needs to be” and could cancel or defer orders, according to Bloomberg. “This is about surviving the present,” he said.
Emirates has outstanding orders for a total of about 200 wide-body jets from both Airbus and Boeing, including the last several Airbus A380s made before the production suspension of the superjumbo jet.
However, the airline’s warning on aircraft acquisitions could be particularly concerning for Boeing.
Emirates is the launch customer — and the largest customer — for Boeing’s new 777X series airplane, with 115 official orders out of the 309 total orders globally for the jet.
Emirates had originally ordered 150 of the planes — 115 of the 777-9 variant and 35 of the smaller 777-8. The airline cut the order to 126 in November and to 115 in December after saying that 11 of the orders were subject to “reconfirmation,” according to FlightGlobal.
The breakdown of the 115 figure between the two variants has not been disclosed. The November update to the order consisted of 101 777-9s and 25 777-8s, FlightGlobal reported.
The 777-9 carries a list price of $442.2 million, while the 777-8 is listed at $410.2 million. Carriers typically receive discounts on aircraft orders.
Emirates increasingly expressed frustration with Boeing in 2019 over delays in 777X approval and production, including those caused by issues with the General Electric engines the plane uses. Airline President Tim Clark, who has repeatedly expressed frustration with the delays, said in November that Emirates planned to put the new plane through extensive testing, which he described as “hell on earth,” before flying passengers.
Emirates is among the largest international carriers, with a global network of connections through its Persian Gulf hub. The airline is also the largest customer for Airbus’ A380 superjumbo jet and is planning to replace the aging giant jetliner with the 777X series, which will be among the largest wide-body jets on the market as the double-decker A380 retires.
The airline has sought to cancel its last few A380 orders and considered accelerating the retirement of some of its older planes.
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Boeing has already been forced to contend with several reduced orders for the 777X, including from British Airways and Lufthansa.
Both Airbus and Boeing have lowered production rates amid reduced demand because of the coronavirus pandemic. Even before the crisis, however, the plane makers faced poor omens in the wide-body sector. Airplane ordering at the 2019 Dubai Airshow was somewhat muted compared with previous years, suggesting a slowing of long-haul capacity growth among Middle Eastern airlines, including Emirates.
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