Emirates to spend $18bn on new jets

Steve Dinneen
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EMIRATES airline placed a blockbuster order for 50 Boeing 777 jetliners at the Dubai Air Show yesterday, underscoring the confidence brimming among fast-growing Gulf airlines despite growing fears of stalling global growth.

The Dubai government-owned carrier, expanding its role as the world’s largest operator of Boeing’s most profitable plane, said the deal was worth $18bn (£11.2bn), the largest commercial order by value in the US planemaker’s history.

Emirates chairman Sheikh Ahmed bin Saeed al Maktoum said: “This order represents a milestone -- it is the single largest dollar value (order) in the Boeing history.

“The 777 has served Emirates very well in terms of seat costs ... especially when we see the fuel price is quite high.”

Fuel costs took a big toll on the airline’s first half profits, sending them down 76 per cent.

Emirates said it had adequate financing in place for 2012, and planned no new bond issues. Sheikh Ahmed said the airline, which launched a heavily oversubscribed $1bn bond in June, would consider a bond if needed and if the timing was right, adding “we don’t have a push”.

Including options to buy 20 more of the twin-aisle aircraft and other agreements, the total deal is worth $26bn, Emirates and Boeing said.

The airline planned to eye a mix of funding options for the order, including Islamic finance, he added. Delivery of the aircraft is slated to begin in 2015.

James Albaugh, chief of Boeing’s commercial division, said the order would sustain thousands of US jobs.

Boeing delivered 127 commercial aircraft in the third quarter, including 100 of its best-selling 737 narrowbodies and 21 widebody 777s. The planemaker, which gets paid for its planes at delivery, set its commercial airplane delivery guidance for 2011 at about 480, down from previous guidance of 485 to 495.

Qatar Airways is expected to place a $6.5bn order for 50 fuel-saving A320neo jets and five A380s from Airbus, and Kuwait lessor Alafco plans to boost a provisional order for 30 Airbus A320neos.