Emirates Secures Order for 15 Airbus A350 Jets

Emirates, the Middle East giant and one of the biggest airline carriers in the world, has placed an order for 15 Airbus A350-900 jets. This order comes as a reprieve for Airbus after a highly publicized dispute between Emirates and engine manufacturer Rolls-Royce prevented a larger deal for European jets at the Dubai Airshow, an event primarily dominated by Boeing. With this announcement, Emirates Chairman and CEO, Sheikh Ahmed bin Saeed Al Maktoum, expressed his satisfaction with the addition of these long-haul jets to the Emirates fleet mix, while also hinting at potential future orders for this aircraft type.

Compromise in the Aftermath of the Engine Row

However, industry sources have labeled this deal as a face-saving compromise, initiated after Emirates criticized the maintenance requirements of the larger A350-1000 engines in the hot and sandy conditions prevalent in the Gulf region. Sheikh Ahmed emphasized that Emirates would work closely with Airbus and Rolls-Royce to ensure optimal operating efficiency and an excellent flying experience for their customers. This $6 billion deal follows intense negotiations centered around the particular needs of the Gulf as Emirates faces mounting competition from Turkey, India, and other markets in its East-West transit model. It also sheds light on the broader industry tensions concerning rising engine costs.

Emirates is by far the biggest user of the Airbus A380 after investing heavily in the world's largest airliner, and is now planning the fleet needed to keep its Dubai super-hub at the center of the aviation map beyond the 2030s as the A380 retires. The airline opened this week's air show with a $52 billion order for 90 Boeing 777X airplanes, saying the U.S. planemaker appeared to be getting a grip on regulatory and other problems surrounding its entry to service after five years of delays.

But Emirates Airline President Tim Clark refused to place a large order for Airbus' broadly similar A350-1000 and blasted Rolls-Royce over the disruption and cost of dealing with frequent maintenance needed to keep the plane's engines running. Emirates would have ordered 35-50 of the planes, he said.

Rolls-Royce acknowledged its engine for the A350-1000 would need more servicing than Emirates would like, but denied Clark's suggestion that the XWB-97 engine was "defective".

Chief Customer Officer Ewen McDonald said the deal for the A350-900, which uses a different variant of engine, was a sign of the airline's trust in Rolls-Royce and held out hope for a future order for the A350-1000.

"We will continue our discussions with Emirates on the A350-1000 engine improvements and look forward to them choosing this aircraft in the future," he said.

Emirates has already ordered 50 A350-900s which are scheduled to arrive from August next year.

Delegates said earlier a top-up order would be seen as a consolation prize for Airbus and Rolls-Royce after Boeing and its main engine supplier GE won the majority of deals, but would leave questions over Airbus's ability to compete with Boeing's 777X in the lucrative Gulf market.

"It is...just to keep the relationship going and so they can talk again," a senior aviation industry source said.

Investors are expected to quiz Rolls-Royce about the durability and pricing of its engines at a Nov. 28 investor day.

Rolls-Royce said earlier in week it was looking at applying technology from its Ultrafan research project to the XWB-97.

Boeing Prevails in Aircraft Orders

In a week dominated by soaring demand for wide-body planes, Boeing won new orders for 196 aircraft while Airbus agreed deals for 55 jets.

Airbus said it had reached an "agreement in principle" for a significant order from Turkish Airlines, but industry sources said the deal had not yet been signed.

Emirates also agreed to buy five additional 787 Dreamliners, while sister airline flyDubai went for 30 with its first wide-body order.

Although political power is consolidated in the UAE capital Abu Dhabi, Monday's high-profile announcement overseen by Dubai's crown prince was symbolic of the value the UAE places on its bilateral relationship with the United States after a recent period of strain, said sources familiar with the matter.

In other business, Turkey-based budget carrier SunExpress announced an order for 45 Boeing 737 MAX narrow-bodies and used the spotlight to issue a reminder of the industry's supply chain problems.

Ethiopian Airlines announced it was buying 20 737 MAX jets nearly five years after the fatal 2019 MAX crash that led to the grounding of the global fleet. It also ordered 11 Dreamliners.

EgyptAir said it was ordering 10 A350-900s from Airbus, while AirBaltic announced it was buying 30 Airbus A220-300s.

Royal Air Maroc signed a repeat order for two additional 787 Dreamliners. EgyptAir said it would lease 18 new Boeing 737 MAX jets from Air Lease Corp.

With Boeing securing orders for 196 aircraft, compared to Airbus' agreement for 55 jets, it became evident that Boeing dominated the orders at the airshow. The event not only showcased significant aircraft purchases but also highlighted the importance of international relationships and the challenges and dynamics within the aviation industry.

Implications and Industry Dynamics

Industry delegates view the order of 15 Airbus A350-900 jets as a consolation prize for Airbus and Rolls-Royce after Boeing's dominant performance in winning major deals during the airshow. However, questions remain about Airbus' ability to compete with Boeing's lucrative 777X in the Gulf market. Analysts suggest that this order aims to maintain a positive relationship between the parties involved and foster future opportunities for collaboration. Investors are expected to seek clarification from Rolls-Royce during an upcoming investor day regarding the durability and pricing of their engines. Rolls-Royce has already indicated their plans to incorporate technology from their Ultrafan research project into the XWB-97 engines.

Emirates' decision to order 15 A350 jets marks an important milestone in their aviation strategy. As the largest user of the Airbus A380, Emirates has made substantial investments in this aircraft. However, with the retirement of the A380 in the 2030s, Emirates is now focused on planning a fleet that will sustain its Dubai super-hub as a major aviation hub. This includes adding the Airbus A350 to its fleet mix, which provides long-haul capabilities and enhances Emirates' operational efficiency.

On the other hand, Boeing's dominance in securing order for 196 aircraft at the airshow solidifies its position in the aviation industry. The company's ability to address regulatory and other challenges surrounding the entry into service of the Boeing 777X has instilled confidence in airline carriers. This is evident from Emirates' $52 billion order for 90 Boeing 777X airplanes, signaling their trust in Boeing's capabilities.

Furthermore, the airshow witnessed several notable orders from other airlines. Turkish budget carrier SunExpress ordered 45 Boeing 737 MAX narrow-body planes, shedding light on the supply chain issues prevalent in the industry. Ethiopian Airlines announced the purchase of 20 737 MAX jets, emphasizing their confidence in the aircraft despite the fatal MAX crash in 2019. EgyptAir and AirBaltic also made significant orders, reflecting the robust demand for both Airbus and Boeing aircraft in various global markets.

In conclusion, the Dubai Airshow saw Emirates securing an order for 15 Airbus A350-900 jets, marking a reprieve from the highly publicized engine row with Rolls-Royce. The compromise reached between these stakeholders highlights the airline's commitment to operational efficiency and customer satisfaction. Additionally, Boeing dominated aircraft orders at the airshow, positioning itself strongly in the aviation market. The event not only showcased significant aircraft purchases but also underscored the importance of international relationships and highlighted the challenges and dynamics within the aviation industry.