Teahan From Germany, joined Nov 1999, 5325 posts, RR: 60 Posted (12 years 11 hours ago) and read 16519 times:
Article from this week’s Flight International:
- 23 A380-800 (hence increasing the total to 45)
- 10 A340-600HGW
- 26 B777-300ER.
PAUL LEWIS / WASHINGTON DC
Carrier set to announce massive order at air show for mix of Airbus A380s, A340-600s and Boeing 777-300ERs
Emirates plans to announce a massive new order at the Paris air show in June for up to 69 additional long-range widebodies including Airbus A380-800s, high gross weight (HGW) A340-600s and Boeing 777-300ERs.
The purchases will form part of a plan designed to triple the size of the Dubai-based carrier over the next 10 years.
The announcement at the air show of a new Emirates order has been expected for several months, but the size and scope of the deal will surprise many. The new deal will comprise: 23 A380s, increasing its total order for the ultra-large aircraft to 45; 10 A340-600s, plus a similar number of options, marking a launch order for the HGW version; and 26 Boeing 777-300ERs. All will be used to provide incremental growth rather than replace existing capacity.
Emirates is already the single largest A380 customer, having increased its commitment from seven to 22 aircraft, including two freighters, in late 2001. With this latest deal the carrier will account for more than one third of the total order backlog for the 555-seat airliner. The decision to order both the 777-300ER and rival A340-600 is a surprise, but reflects the heavily discounted competing deals put on Emirates' table by Boeing and Airbus, as well leasing companies General Electric Capital Aviation Services and International Lease Finance, both of which are expected to share in the deal.
"We are working towards a 16 June announcement," Emirates confirms. "We placed a large order at the Dubai air show 2001 and it's likely that this order will be increased at Paris."
The airline had announced in 2001 a letter of intent for 25 more 777s, but at the time did not specify a version. It already operates nine standard 777-200s and 12 stretched -300 versions. Plans to phase out the former have been dropped.
The A340-600 HGW will have a maximum take-off weight of 376,000kg (828,200lb). Emirates already has six longer-range but smaller A340-500s on order to open nonstop routes from Dubai to Sydney and New York, but manufacturer delays have pushed back initial deliveries until September.
While the four-engined A340-600 and the 777-300ER twin come with only one choice of powerplant - the Rolls-Royce Trent 500 and General Electric GE90-115B respectively - the airline intends an engine competition for the A380s. The GE/Pratt & Whitney Engine Alliance GP7200 was selected last year to power Emirates' first batch of 22 aircraft.
Rather good news, to say the least.
[Edited 2003-05-27 19:33:14]
Goodbye SR-LX MD-11 / 6th of March 1991 to the 31st of October 2004
Boieng747-400 From , joined Dec 1969, posts, RR:
Reply 4, posted (12 years 11 hours ago) and read 16347 times:
Very good order for Airbus and Boeing. I continue to wonder where EK will make all of these huge planes fly to. 45 A388s that is quite a lot not to say the least! Its nice to see that the airline has helped Dubai become worldwide known and visited.
N79969 From , joined Dec 1969, posts, RR:
Reply 6, posted (12 years 11 hours ago) and read 16332 times:
Absolutely unbelievable. I read that one or two mega-orders ago that one of their fleet purchases exceeded the GDP of Dubai. This has got to be another one of those orders. I would have thought the lessons of SARS would have made an impression on them.
These guys cannot go out of business. The government will not let happen.
N79969 From , joined Dec 1969, posts, RR:
Reply 9, posted (12 years 11 hours ago) and read 16249 times:
I also wonder where in the heck that they can fly that many widebody aircraft particularly A380. There exposure to a traffic downturn is immense. I have said it before and I say it again: given this airline's voracious appetite for widebody airplanes, it is bizarre that they do not operate a single passenger 744 airplane.
Joni From , joined Dec 1969, posts, RR:
Reply 10, posted (12 years 11 hours ago) and read 16239 times:
Does Emirates know something the rest of us don't? Likely now is a good time to buy new planes since prices are bound to be low, but this kind of fleet enlargement plans mean they have to be very confident of future traffic.
The article didn't mention what kind of delivery schedule they mean to maintain, perhaps this is a very long-term project for them and they're just taking advantage of a good buying opportunity.
Aerosol From Germany, joined Oct 2000, 563 posts, RR: 0
Reply 12, posted (12 years 11 hours ago) and read 16237 times:
In my opinion it is a perfect example of anticyclic investment. At the moment prices for "hardware" are quite low.
A do not know the annual production rate of the A380, but mid-term they could be the only ones offering a capacity for large scale inter hub traffic. Another idea could be that they will be a major player in the leasing business.
Of course, everything assuming air travel will develop as projected in the next 6-15 years.
ConcordeBoy From , joined Dec 1969, posts, RR:
Reply 13, posted (12 years 11 hours ago) and read 16221 times:
Another idea could be that they will be a major player in the leasing business.
That'd be my best guess.
Perhaps EK is gathering these such aircraft while the market is low... while planning to lease them to airlines still "unsure" as to the A388's potential/performance. Cathay, Japan, All Nippon, and Korean all come to mind.
N79969 From , joined Dec 1969, posts, RR:
Reply 16, posted (12 years 10 hours ago) and read 16197 times:
This is an anticyclic investment in the aircraft market. True. However demand for airplanes is derived from the demand for air travel ultimately. As everyone knows, the market for air travel is unforgiving and very cyclical. A future downturn in air travel will result in parked airplanes somewhere. Whether they lease them or operate them, the risk exposure still exists.
I don't doubt that EK's managers are capable individuals however I think they are essentially unconstrained as -437B points out.
He became managing director two years later. "We were given $10m and told not to come back for more."
And Emirates has been standing on its own two feet ever since. "We are uniquely unprotected against competition," he said. "The government here believes in absolute free trade. We get no protection from the competition in our home market at all and that is unique.".
As for the size of aircraft, think not of capacity on routes in 2003 but of those post 2007. Our own MAN service saw 96% loads in their last financial year and they haven't upgraded the service until now but this article quotes him as saying, "The next step is likely to be putting a bigger aircraft on the route before we start thinking of adding a third flight.". I would imagine that sentiment would hold true for other services.
Eg777er From United Kingdom, joined Feb 2000, 1840 posts, RR: 14
Reply 20, posted (12 years 10 hours ago) and read 16106 times:
Before you lot all start shouting about the "power of oil" (hey, if it works for the US and Iraq, it can't be that bad), take a look at the Emirates Group annual report 2002-03, availabile at http://www.ekgroup.com/ANREP2003/index.html.
Some very interesting reading:
Traffic increased by 31.6% to 5,145 million tonne-kilometres, 3 percentage
points higher than the capacity increase (28.5% to 7,350 million tonne-kilometres).
Aircraft departures increased by 16.8% to 45,452, while aircraft
utilisation remained one of the highest in the industry at 13 hours per day.
The increase in traffic came principally from:
• the introduction of new passenger services to Khartoum, Perth, Mauritius,
Osaka and Cochin
• the increase in frequencies to the United Kingdom, Germany, France, Qatar,
Syria and Iran
• increased capacity to existing destinations with larger aircraft, mainly
Sydney, Sanaa, Bahrain, Istanbul and Cairo
• increase in freighter operations (58% higher compared with the previous
year) with the introduction of new cargo services to Shanghai and Liege and
the operation of charters to various destinations.
Passenger seat factor improved by 2.3 percentage points to set a new record
at 76.6%. Passengers uplifted reached 8.5 million in 2002-03, representing an
increase of 25.7% over last year, despite a drop in seat factor during March on
account of the situation in Iraq.
Cargo carried in 2002-03 improved by 31.1% to 525,188 tonnes (2001-02:
400,569 tonnes), recording strong growth across the entire network.
Overall load factor improved by 1.7 percentage points to 70.0%, reflecting a
very strong performance considering the large increase in capacity.
So if EK can increase passenger uplift by 25.7% during the worst year ever for aviation whilst increasing their yield, who's to say that a) they can't make an un-supported profit and b) they won't need those A380s come 2010??
B757300 From United States of America, joined Dec 2000, 4114 posts, RR: 22
Reply 21, posted (12 years 10 hours ago) and read 16087 times:
Like others have said, it must be nice when you run a business and don't have to worry about making a profit. I just see it very unlikely that they will need 45 A380's. Heck, few airlines in the world operate that many 747's. Only a few of the large 747 operators have ordered the A380 and in no where near the numbers that Emirates is planning. We'll see if Emirates succeeds or if it blows up in their financial faces.
747-600X From United States of America, joined Jan 2000, 2806 posts, RR: 14
Reply 23, posted (12 years 10 hours ago) and read 16076 times:
I tend to agree with STT757. What above Earth are they planning on doing with these things? The population is actually 2.5 million, but still - that's less than most single major cities in the rest of the civilized world. I don't suppose I can think of any real reasons to object to their buying them, but at the same time, I can think of a lot better things to do with that kind of money. And of course, the question remains - what will they use them all for??