Boeing secures record Emirates deal

U.A.E. Vice President and Prime Minister Sheikh Mohammed bin Rashed al-Maktoum visits the Dubai Airshow on November 13.

Story highlights

  • Emirates announced it would buy at least 50 twin-aisle airplanes from Boeing
  • The order for 50 Boeing 777 long-haul aircraft is worth $18bn at list prices
  • This is Boeing's single largest commercial aircraft order in its 95 year history
Boeing on Sunday won its single largest ever commercial aircraft order when Emirates, the fast-growing Gulf carrier, announced it would buy at least 50 twin-aisle passenger airplanes from the US manufacturer.
The order for 50 Boeing 777 long-haul aircraft is worth $18bn at list prices, a record contract by value for the US company.
Unveiled at the Dubai air show, the deal provides a much-needed boost for Boeing, which has been badly trailing Airbus -- its arch rival -- in the number of orders won this year.
The contract also underlines the ambitions of Emirates, the Dubai-based carrier that is rapidly becoming a strong rival to Asian, European and US airlines.
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Emirates currently has a fleet of 162 aircraft and is already the biggest operator of Boeing's 777 aircraft and Airbus' A380 superjumbos.
Jim Albaugh, head of Boeing's commercial aircraft division, said Boeing's single largest order by dollar value in its 95-year history was an "extremely proud moment", adding that the Emirates' deal would sustain several thousand jobs in the US.
Sheikh Ahmed Bin Saeed Al Maktoum, Emirates' chief executive, said the 777 order was part of the airline's strategy to expand across Africa, Asia, Europe and the US.
Emirates is buying 50 Boeing 777-300 ER planes, which seat 365 passengers, and deliveries of the aircraft will start in 2015.
Although the order is worth $18bn at list prices, Emirates is expected to pay significantly less because airlines typically secure discounts on large deals. Boeing's previous record single order was a 2006 deal with Air India for 68 planes, worth $11bn at list prices.
Emirates has taken out options on a further 20 Boeing 777-300 ER planes, which means the order's value could rise to $26bn at list prices.
Nick Cunningham, analyst at Agency Partners, said the order should represent "very profitable" business to Boeing because the US company has finished the 777's costly development phase.
He added that Airbus had effectively "missed out" on the opportunity to secure Emirates' order because of the European manufacturer's decision to delay its planned new alternative to the 777-300 ER. Airbus' A350-1000, which will seat 350 passengers, was due to enter service in 2015, but the timetable has slipped to 2017.
Airbus -- a subsidiary of the European Aeronautic Defence and Space company -- has announced 1,038 orders for new aircraft net of cancellations in the first nine months of this year, compared to Boeing's 426.
Airbus' higher tally is partly due to strong demand for its A320 NEO, the planned new single-aisle, short-haul plane that is more fuel efficient than the existing A320.
However, Mr Albaugh claimed Boeing's plane deliveries to customers could overtake Airbus' in 2013, partly because of demand for the US company's new 787 twin-aisle, long haul aircraft. Airbus' deliveries have surpassed Boeing's every year since 2003.