Emirates To Order 100 Planes Shortly

UAL777UK · Wed Jan 24, 2007 10:57 pm

Jeez, these guys are expanding like nothing.......I wonder if the delays with the 380 will heavily influebce their decision??

http://yahoo.reuters.com/news/articl...58_L24252628&type=comktNews&rpc=44

MastaHanky · Wed Jan 24, 2007 10:59 pm

I think Emirates has been saying they're going to place a 100 plane order in two or three months for the past two years!

manni · Wed Jan 24, 2007 11:09 pm

There seem to be a few errors in the article. The deal is valued US$15 billion at listprice. Both the 787 (except the 783) and the A350XWB are more then US$150 million a piece IIRC, 100 of them would result in more then US$15 billion.

Emirates expects to take delivery of the first aircraft in 2012? How are they going to manage that if they choose the A350XWB, which is, according to the same article, due for 2013?

------------------------------------------------------------------------

"100 mid-sized, long-range planes, the first of which it expects to receive in 2012, its vice chairman said."

"Airbus is offering its A350 XWB due in 2013 versus Boeing Co.'s 787 due in 2008 for a deal that could be worth $15 billion at list prices."

NYC777 · Wed Jan 24, 2007 11:11 pm

Quoting Manni (Reply 2):
Emirates expects to take delivery of the first aircraft in 2012? How are they going to manage that if they choose the A350XWB, which is, according to the same article, due for 2013?

Well then it looks as if their decision is already made for them.

leelaw · Wed Jan 24, 2007 11:13 pm

From the Reuters article linked by the threadstarter:

Quote:
...Flanagan [vice chairman of EK] said Emirates was not seeking a discount on the 100 planes from Airbus related to the A380 delay.

"We want to make those separate. We want to make sure there is no muddying the water between the cost of 100 and the compensation," he said...

"...We think they (other airlines such as Singapore Airlines) settled too early. We think in the next 2-3 months we should be clear to reach settlement and accept compensation," Flanagan said.

"There is no way we can plug the capacity gap or the profitability gap. The hit has been quite strong in terms of revenue, profitability, in terms of network..."

jacobin777 · Wed Jan 24, 2007 11:15 pm

"''We'll make our minds up on this order when we're entirely clear on what these models offer,'' he (Emirates Vice Chairman Flanagan) said. ''We're not clear on the A350 widebody yet. We expect a clear picture from Airbus in a few months.''"

http://www.bloomberg.com/apps/news?p...=conews&tkr=BA:US&sid=awD0AG7VaAf4

Danny · Wed Jan 24, 2007 11:24 pm

Quoting NYC777 (Reply 3):
Well then it looks as if their decision is already made for them.

Not really - read below:

Quoting Jacobin777 (Reply 5):
"''We'll make our minds up on this order when we're entirely clear on what these models offer,'' he (Emirates Vice Chairman Flanagan) said. ''We're not clear on the A350 widebody yet. We expect a clear picture from Airbus in a few months.''"

http://www.bloomberg.com/apps/news?p...VaAf4

manni · Wed Jan 24, 2007 11:27 pm

Quoting NYC777 (Reply 3):
Well then it looks as if their decision is already made for them.

Looks like it. It seems that Airbus has decided to speed up the development of the A350XWB, to get it out in time for EK to take delivery of them in 2012. duck

NYC777 · Wed Jan 24, 2007 11:39 pm

Quoting Manni (Reply 7):
Looks like it. It seems that Airbus has decided to speed up the development of the A350XWB, to get it out in time for EK to take delivery of them in 2012.

Well if the past is any indicator the A350 won't be out anytime before 2015.

manni · Wed Jan 24, 2007 11:47 pm

Quoting NYC777 (Reply 8):

Well if the past is any indicator the A350 won't be out anytime before 2015.

The A350 is history, it wont even make 2015. The A350XWB on the other hand... Wink

scouseflyer · Wed Jan 24, 2007 11:51 pm

If this ends up happening (and by God they're taking their time!) will it be the biggest single order (by cost) in history?

NYC777 · Wed Jan 24, 2007 11:59 pm

Quoting Manni (Reply 9):
The A350 is history, it wont even make 2015. The A350XWB on the other hand...

Different label, same outcome.

leelaw · Thu Jan 25, 2007 12:04 am

Quoting Scouseflyer (Reply 10):
f this ends up happening (and by God they're taking their time!) will it be the biggest single order (by cost) in history?

Perhaps, if EK actually makes a firm order for 100 aircraft. My hunch is the "commitment" will be for 100 aircraft, but the firm order will probably be for 50 aircraft with options and/or purchase rights making up the balance.

slz396 · Thu Jan 25, 2007 12:09 am

Quoting Leelaw (Reply 12):
My hunch is the "commitment" will be for 100 aircraft, but the firm order will probably be for 50 aircraft with options and/or purchase rights making up the balance

Indeed, my feelings exactly.

Besides, although 50 widebodies is not a small order, it is not really THAT impressive either and is needn't even be the single biggest WB order in 2007 (provided QR firms up its order for 60 A350s).

BTW- can anybody explain what the difference is between an option and a purchase right?

leelaw · Thu Jan 25, 2007 12:16 am

Quoting Slz396 (Reply 13):
can anybody explain what the difference is between an option and a purchase right?

Option: the option-holder has a right to a specified delivery slot, usually in the form of a "right of first refusal."
Purchase Right: the right-holder's delivery slot is determined at the time the purchase right is exercised.

[Edited 2007-01-24 16:21:06]

astuteman · Thu Jan 25, 2007 12:17 am

Quoting Leelaw (Reply 12):
Perhaps, if EK actually makes a firm order for 100 aircraft. My hunch is the "commitment" will be for 100 aircraft, but the firm order will probably be for 50 aircraft with options and/or purchase rights making up the balance.

Bearing a passing resemblance to the QF order, in that case..........

Regards

slz396 · Thu Jan 25, 2007 12:22 am

Quoting Leelaw (Reply 14):
Option: the option-holder has a right to a specified delivery slot, usually in the form of a "right of first refusal."
Purchase Right: the right-holder's deliver slot is determined at the time the purchase right is exercised.

So in fact a purchase right is a very loose commitment?

Just my personal view, but purchase rights are just a way to pump up the total order number in the press release really.... if you don't commit to a possible delivery date, there really isn't anything distinguishing you from any other potential future customer.

brendows · Thu Jan 25, 2007 12:24 am

Quoting Slz396 (Reply 16):
Just my personal view, but purchase rights are just a way to pump up the total order number in the press release really.... if you don't commit to a possible delivery date, there really isn't anything distinguishing you from any other potential future customer.

I wouldn't say so, you still got a purchase price similar to the one you negotiated for the firm orders.

slz396 · Thu Jan 25, 2007 12:35 am

Quoting Brendows (Reply 17):
I wouldn't say so, you still got a purchase price similar to the one you negotiated for the firm orders.

Are you sure about that?

Because since there is no date linked to the purchase right, you could execute the right in let's say 15 years from now (at what time the price you suggest is pre-set will be rediculously low)

One could argue you'd have a very loose indicative price range when you have a purchase right, but then any customer who wants to firmly order a similar number of planes as are currently being granted purchase rights on is virtually guaranteed of a 40%+ list price reduction as well...

I repeat myself: purchase rights are just an invention of an overly active PR machine to prop up the number of the commitment without having to take options (which cost money).

billreid · Thu Jan 25, 2007 12:36 am

Quoting Manni (Reply 2):
Emirates expects to take delivery of the first aircraft in 2012? How are they going to manage that if they choose the A350XWB, which is, according to the same article, due for 2013?

Sure sounds like a boeing decision has already been made.
I am sure skepticism exists, with the A350XWB givin that the financing to design in not yet in place with EADS. And the losses incurred by the A380.
Politically, the UAE government wants balance and thus it is Boeings turn for some significant orders.

I would be very very surprised with a A350 order given the polotics and the A380 fiasco.

scouseflyer · Thu Jan 25, 2007 12:39 am

Quoting BillReid (Reply 19):
Politically, the UAE government wants balance and thus it is Boeings turn for some significant orders.

56 copies of the T7 is pretty significant don't you think?

billreid · Thu Jan 25, 2007 12:58 am

Quoting Scouseflyer (Reply 20):
56 copies of the T7 is pretty significant don't you think?

Good point. But the A380 has gotten more than its fair share of notariety, be it good or bad.

Boeing may sit in more favorable light given the A350 continous wavoring and the A380 debacle.

dw747400 · Thu Jan 25, 2007 1:12 am

Quoting Slz396 (Reply 18):
Because since there is no date linked to the purchase right, you could execute the right in let's say 15 years from now (at what time the price you suggest is pre-set will be rediculously low)

Long term deals like this are generally pegged to economic indicators to account for inflation and other price variations... I know from experience that some business jet manufacturers even peg their price for firm orders to the consumer price index.

Additionally, its perfectly reasonable to expect a time limit on the order. Options are definitely more than mere publicity stunts, though I'm not familiar enough with dealings on airliners to say exactly how much more!

cobra27 · Thu Jan 25, 2007 1:15 am

I think has more chances because of its size 350 pax. Emirates likes bigger planes, they burn less. Seems they make a lot of money by the number of passengers (more then 400 in some 777-200ER) Even the enlarged 787 will only seat around 300 pax. But on the other way 787 will come way sooner, around 5 years before. Maybe they will order both

Stitch · Thu Jan 25, 2007 1:20 am

The only way EK is going to get 100 787's starting in 2012 is if they already have slot deposits that they have been keeping up payments on while they wait for the A350/A350XWB program to evolve.

I'm not sure how one defines "mid-size", but I am guessing something in the A333/A343/A359X/787-9/787-10/772 range. However, "long range" negates the A333 and I cannot see EK taking the A343.

So that leaves the A350X-900, 787-9, 787-10, and 777-200LR. In theory, the three Boeing products are available in 2012 (the 772LR for sure, the 787-9 and 787-10 if EK has slots already in hand, with the additional caveat that Boeing can EIS the 787-10 in 2012).

EK may feel they can no longer wait to see what the A350XWB brings to the table as 787 slots continue to fill and will fill even faster if a successful test regimen happens this Summer.

However, EK can always add the A350XWB later (considering how fast they are expanding), so even if they do order the 787 in numbers up to 100, that doesn't mean the A350XWB will never fly in EK colors.

keesje · Thu Jan 25, 2007 1:44 am

Quoting NYC777 (Reply 3):
Well then it looks as if their decision is already made for them.

Yes, wonder what Airbus can possibly do to solve this problem..

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kaneporta1 · Thu Jan 25, 2007 1:44 am

This one could go either way. On one hand EK may not want to wait till 2013 for the 350, on the other hand it's not certain that Boeing can deliver much sooner, especially with the recently surfaced rumors about possible 787 delays.

CV580Freak · Thu Jan 25, 2007 1:46 am

Quoting Stitch (Reply 25):
The only way EK is going to get 100 787's starting in 2012 is if they already have slot deposits that they have been keeping up payments on

When are the nearest delivery positions ???

scouseflyer · Thu Jan 25, 2007 1:51 am

Quoting CV580Freak (Reply 28):
When are the nearest delivery positions ???

That's a closely guarded secret - but there's over 400 787s on order and they're looking at something around 100 built a year initially at full chat that takes production through to mid 2012.....

Health warning figures are very approx and the rate is variable and not everyone wants their frames asap!

NYC777 · Thu Jan 25, 2007 1:57 am

Quoting Keesje (Reply 26):
Yes, wonder what Airbus can possibly do to solve this problem..

Heck if they need interim lift then they could always use the 77W. That type is becoming more prevalent in their fleet.

jacobin777 · Thu Jan 25, 2007 2:14 am

Quoting Keesje (Reply 26):
Yes, wonder what Airbus can possibly do to solve this problem..

Given they are looking for a 300 seater and EK's 2-class A330's have 284 seats, that might solve one of their situations....the 3-class A330's have 237 seats, I don't know how they will solve that situation...

[Edited 2007-01-24 18:14:47]

beech19 · Thu Jan 25, 2007 2:54 am

Quoting CV580Freak (Reply 27):
When are the nearest delivery positions ???

Well... NEW delivery slots aren't available until 2014. I would wager EK already has slots lined up if they are talking delivery in 2012 and those would be 787's, A350 won't be ready then. 2013 is gone... sold out. So someone (aside from EK, not saying...) has a huge set of slots already... Wink

EI321 · Thu Jan 25, 2007 2:57 am

Am I the only one that thinks they will order both?

leelaw · Thu Jan 25, 2007 3:04 am

Quoting EI321 (Reply 32):
Am I the only one that thinks they will order both?

IIRC, both Tim Clark and Sheik Maktoum have rule-out spliting this order a la SQ in several interviews over the last few months.

jacobin777 · Thu Jan 25, 2007 3:04 am

Quoting EI321 (Reply 32):
Am I the only one that thinks they will order both?

Considering the vice-chairman of EK Flanagan stated "probably only one type", you are going to be in a small minority..... Wink

beech19 · Thu Jan 25, 2007 3:06 am

Quoting EI321 (Reply 32):
Am I the only one that thinks they will order both?

I thought so at first... but i think its less and less likely. It all depends on if they have slots already at Boeing. If they do they will take all Boeing. If not another airline may already have eaten up a huge amount of slots that will squash EK getting anything before 2014 for 787's and they may take a split order. EK has been burned bad by Airbus so we'll see. But from snippets floating around its supposed to be all from one company (Boeing would be the obvious choice here i think).

The 1H'07 will be an amazing time for the 787... Wink

EI321 · Thu Jan 25, 2007 3:07 am

Quoting Leelaw (Reply 33):
Quoting EI321 (Reply 32):
Am I the only one that thinks they will order both?

IIRC, both Tim Clark and Sheik Maktoum have rule-out spliting this order a la SQ in several interviews over the last few months.

Which would be a great way to reduce the initial price from the manufacturers. Let them fight it out, then order 50 of one and 50 of the other at a later date. It not like EK can get sued for doing this!

EI321 · Thu Jan 25, 2007 3:10 am

Quoting Beech19 (Reply 35):
It all depends on if they have slots already at Boeing. If they do they will take all Boeing

So why are they looking for an offer from airbus? Either they have slots on 787s and are looking at getting A350s aswell, or they have no 787 slots.

beech19 · Thu Jan 25, 2007 3:20 am

Quoting EI321 (Reply 37):
So why are they looking for an offer from airbus? Either they have slots on 787s and are looking at getting A350s aswell, or they have no 787 slots.

They may have slots but not firm orders... you can still negotiate prices after you own a slot. Pressure on Boeing... EK knows the business. They could be doing just to see if Boeing will speed up the line, open a second... anything. Its called bluffing... Wink

ebbuk · Thu Jan 25, 2007 3:34 am

I would be very happy to see the EK order go to Boeing. Curiously, I think the way that EK want separate compensation for 380 makes me think that the order is going Stateside. Well, they deserve it.

ZRHnerd · Thu Jan 25, 2007 3:39 am

If EK will commit to the A350, i can see the "they got them for half the price"-kinda comments already duck

EI321 · Thu Jan 25, 2007 3:46 am

Quoting ZRHnerd (Reply 40):
If EK will commit to the A350, i can see the "they got them for half the price"-kinda comments already

Nah would never happen Smile

Quoting Beech19 (Reply 38):
Its called bluffing...

So is 'we will only buy one or the other'!

ZRHnerd · Thu Jan 25, 2007 3:49 am

Quoting EI321 (Reply 41):
Nah would never happen

Looking at all the die-hard boeing fans on this website i can hardly believe that Big grin

beech19 · Thu Jan 25, 2007 3:56 am

Quoting EI321 (Reply 41):
So is 'we will only buy one or the other'!

Could be.

But i doubt it... i think we will see EK order 787-9/10's come early this summer.

Saying something that could be considered fact and to be bluffing about it could turn the person/organization into liars, not good for business. Just comparing offers shows good business sense as they are trying to get a better deal, even if they never truely had an intent to buy the other product.

PS- I'm still shocked that no one is talking about the other less public but HUGE order pending for this year... Exciting times...

NYC777 · Thu Jan 25, 2007 3:59 am

Quoting Beech19 (Reply 43):
PS- I'm still shocked that no one is talking about the other less public but HUGE order pending for this year... Exciting times...

Oh I think that'll be talked up as we get closer to June and Paris!

[Edited 2007-01-24 20:10:00]

beech19 · Thu Jan 25, 2007 4:03 am

Quoting NYC777 (Reply 44):
Oh I think that'll be taked up as we get closer to June and Paris!

Yeah... you are probably right. My mistake... Wink

EI321 · Thu Jan 25, 2007 4:08 am

Quoting Beech19 (Reply 43):
PS- I'm still shocked that no one is talking about the other less public but HUGE order pending for this year... Exciting times...

Which one, BA?

beech19 · Thu Jan 25, 2007 4:11 am

Quoting EI321 (Reply 46):
Which one, BA?

I wish i could say... really...

NYC777 · Thu Jan 25, 2007 4:11 am

Quoting EI321 (Reply 46):
Which one, BA?

No, it's an order by a North American carrier. Very large order for 787s.

EI321 · Thu Jan 25, 2007 4:14 am

DL or AA both are obvious 787 customers!

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