Emirates' $18 billion Boeing order kicks off air show

Sun Nov 13, 2011 6:07am EST
 
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By Praveen Menon and Tim Hepher

DUBAI (Reuters) - Emirates airline placed a blockbuster order for 50 Boeing (BA.N: Quote) 777 jetliners at the Dubai Air Show on Sunday, underscoring the confidence brimming among fast-growing Gulf airlines despite growing fears of stalling global growth.

The Dubai government-owned carrier, expanding its role as the world's largest operator of Boeing's most profitable plane, said the deal was worth $18 billion, the largest commercial order by value in the U.S. planemaker's history.

Reuters reported on Friday that Emirates, which has led efforts by Gulf-based carriers to challenge European and Asian carriers by establishing the region as a major East-West hub, would place an order of between 30 and 50 Boeing 777 aircraft.

"This order represents a milestone -- it is the single largest dollar value (order) in the Boeing history," Emirates Chairman Sheikh Ahmed bin Saeed al Maktoum said at a press conference, before signing the deal with Boeing representatives as Dubai's ruler, Sheikh Mohammed bin Rashid al Maktoum, looked on.

"(The) 777 has served Emirates very well in terms of seat costs ... especially when we see the fuel price is quite high."

Fuel costs took a big toll on the airline's first half profits, sending them down 76 percent.

Emirates said it had adequate financing in place for 2012, and planned no new bond issue. Sheikh Ahmed said the airline, which launched a heavily oversubscribed $1 billion bond in June, would consider a bond if needed and if the timing was right, adding "we don't have a push."

Including options to buy 20 more of the twin-aisle aircraft and other agreements, the total deal is worth $26 billion, Emirates and Boeing said.   Continued...