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Dubai leasing firm slashes Airbus order by $3 bln

Lessor cuts Airbus order volume by 25 pct, data shows.

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August 7, 2010 10:18 by



Europe’s Airbus said on Friday it had more than doubled its tally of 2010 orders due to a bumper Farnborough Airshow, however the pick-up was marred by $3 billion in cancelled orders from Dubai Aerospace Enterprise (DAE).

The Dubai-based lessor slashed an order for 100 Airbus passenger jets by 25 percent in volume terms, shedding 18 orders for narrow-body A320 planes and seven orders for A350-900 mid-sized jets, July figures released by the European planemaker showed.

The move brings to more than $8 billion the catalogue value of DAE cancellations, totalling 50 aircraft, revealed in Airbus and Boeing data published in the past 24 hours.

“I have no comment on that,” Mohammed Al Zarooni, recently appointed chairman of state-owned DAE, said when contacted by telephone.

Airbus and Boeing declined to comment on the cancellations.

Leasing companies were hard hit during the financial crisis though some returned with bulk orders for narrow-body planes at last months’ Farnborough trade show, which delivered unexpectedly robust evidence of an economic turnaround.

Excluding the effect of cancellations, Airbus said its cumulative 2010 orders jumped to 286 planes by the end of July from 131 planes in the first half of the year.

Deliveries reached 298 aircraft. The EADS unit targets over 400 orders and a record 500 deliveries this year.

There have been several specialist industry reports that part of DAE’s order portfolio would be transferred to Dubai’s Emirates airline, which ordered 30 more 777s at Farnborough.

Al Zarooni’s predecessor as DAE chairman was Sheikh Ahmed bin Saeed Al Maktoum, chairman of The Emirates Group.

On Thursday, Boeing data revealed cancellations for 25 jets worth over a total of $5 billion at catalogue prices. Comparisons with previously published data indicated the cuts came from DAE.

DAE had ordered the 15 787-8 Dreamliners and 10 777-300ER aircraft in 2007, at the peak of a global order boom.

Boeing’s latest backlog did not include any such wide-body passenger jets for the leasing and repair firm. It did, however, have 91 unfilled DAE orders for narrow-body jets and freighters.

DAE also still has 52 Airbus A320 planes and 23 A350-900s, designed to compete with the Boeing Dreamliner, on order with a total list value of $10 billion at current prices.

The Director General of Dubai’s Department of Finance, Abdelrahman al Saleh, said recently DAE was in negotiations with Boeing and Airbus on its total of some 220 plane orders.

Airbus Sales Chief John Leahy said at Farnborough that it was “no secret” that DAE was facing disruption over its orders.

After adjusting for total cancellations in the past month, Airbus reported a net total of 245 new orders in the first seven months of the year, up from 117 by the end of June.

The data leaves Boeing ahead of its rival in the race for 2010 orders as the industry exits recession, though it still ranks in second place behind Airbus in terms of production.

Boeing said it had received total orders for 319 planes between January and July, and a net total of 255 planes after adjusting for cancellations. The net orders include 229 narrow-body Boeing 737 short-haul and medium-haul planes.

(By Tim Hepher. Reporting by Tim Hepher, Erika Solomon; Editing by Jon Loades-Carter, Sharon Lindores)



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