Wings Magazine

Mideast buyers remain bullish despite economy

Nov. 14, 2011, Dubai, U.A.E. - Airbus on Monday expanded an order for its new A320neo jets and Boeing snagged another customer for its 787 Dreamliner at the Dubai Airshow as Mideast buyers showed they remain bullish despite the uncertain global economy.

November 14, 2011  By The Associated Press

Airbus scored the biggest prize of the day, boosting an existing commitment from Kuwait's Aviation Lease and Finance Co. for the A320neo to 50 planes. The leasing firm, known as ALAFCO, also took options to buy another 30 of the planes.

The deal extends an initial agreement signed by ALAFCO at this summer's Paris Le Bourget show, when it agreed to buy 30 of the narrow-body planes.

The A320neo sports a new engine option and other features designed to use 15 percent less fuel than older models of the single-aisle A320. It is scheduled to enter service in 2015.

The deal, before options, is worth about $4.6 billion at list prices, though buyers typically negotiate discounts.


Leasing companies such as ALAFCO rent out planes to airlines so the carriers don't have to assume the costs and risks of owning all the planes in their fleets. It mainly leases plans to regional airlines in the Middle East and Asia.

Boeing Co. meanwhile picked up a new regional customer for its much-hyped 787.

It and Oman Air said the carrier ordered six Boeing 787-8 aircraft, though the twin-engined planes won't translate into additional business for the Chicago-based plane maker. That's because Oman Air is taking over orders previously placed by ALAFCO.

Oman Air and Boeing didn't provide financial terms of the order. Each 787-8 costs $193.5 million at list prices.

"Our decision to order the 787-8 is part of Oman Air's long-term growth strategy to expand and modernize our fleet with newer, more  fuel-efficient airplanes," airline CEO Peter Hill said in a statement.

ALAFCO Chairman Ahmed al-Zabin said the decision to shift the 787 orders to Oman Air represented an extension of the company's view that it is a "strategic partner" for Boeing in the region. It previously announced plans to lease the Boeing planes to Omani carrier.

"Whatever is good for us and Boeing and the customer, we just do it. And that's what you're seeing," he said when asked about the Oman Air deal.

Japan's All Nippon Airways operated the first commercial flight of the 787 late last month following a series of manufacturing delays. The plane is made of lightweight composite materials and promises to be 20 percent more fuel-efficient than similar planes.

Long lines of curious spectators have lined up in Dubai to step aboard a 787 display model, which is making its debut at the Mideast airshow.

Oman Air is the flagship carrier of the Sultanate of Oman, located on the southestern tip of the Arabian Peninsula. The airline, set up in 1993, is far smaller than Gulf behemoths such as Dubai's Emirates and Qatar Airways.

Qatar Airways is among the regional carriers that have already signed up for the Dreamliner. It has ordered 30 of the planes and has options for 30 more. The carrier is expected to announce additional aircraft orders at this week's show.

Its Dubai-based rival Emirates, the region's biggest carrier, on Sunday placed an unexpectedly large order for 50 more Boeing 777s, signaling it remains optimistic about its ambitious growth plans despite the shake global economy. Boeing said he deal, worth $18 billion at list prices, was its biggest-ever single order in by value.

Gulf airlines have boomed in recent years by funneling travelers from far-flung global destinations through hubs such as Dubai and the Qatari capital Doha.

Airbus predicts the Middle East will require some 1,920 new planes worth more than $347 billion through 2030, according to a forecast released Monday.

Boeing thinks the potential market is even bigger. Its own forecast, released shortly after its rival's, puts Mideast demand at 2,520 planes worth $450 billion by the end of next decade.


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