Boeing Co. opened the Dubai Airshow with a flurry of orders led by a whopping $52 billion widebody commitment from Emirates Airline, while teasing the possibility of more as China moves closer to a deal for the 737 Max.
The US planemaker posted the biggest advance among Dow Jones Industrial Average members after Emirates said it would buy an additional 90 of Boeing’s coming 777X model and five more 787s, confirming a Bloomberg News report. Emirates was already the biggest customer for the massive twin-engine 777X, which sports wingtips that fold to make it easier to fit through airports.
Boeing also scored wins with a narrowbody order for as many as 90 of its top-selling 737 Max jets at Turkey’s SunExpress, and 18 of the model from EgyptAir. The US manufacturer picked up more commitments for the hot-selling 787 widebody, with Royal Jordanian adding a handful of Dreamliners and FlyDubai picking up 30 of the model — the first time the carrier has bought larger twin-aisle aircraft.
“It’s pretty darn big,” Boeing commercial chief Stan Deal said of the order flow in Dubai. “I’m not counting my chickens yet, and it’s not over. But it’s a big one.”
Boeing shares rose 3.9% as of 9:36 a.m. in New York, for their biggest intraday gain since July. The Dow Jones Industrial Average was down 0.2%.
Airbus Talks
Airbus, meanwhile, made do with a midsize A220 narrowbody order from AirBaltic and a confirmation from Turkish Airlines that the two sides are close on a major aircraft deal. But there was no megadeal, either from Turkish or from Emirates, as talks around engines supplied by Rolls-Royce Holdings Plc proved to be a sticking point to a deal with the Gulf carrier.
Boeing’s Deal spent much of the day shuttling back and forth between Boeing’s offices at the show, where airline executives and prospective customers mingle to get transactions over the line, and the main press center where he announced the accords in rapid succession. Emirates made by far the biggest impact with its top-up order, which massively extends the airline’s already huge backlog of widebody planes.
“Demand for travel on Emirates is one of the strongest it’s ever been in its history,” the airline’s president, Tim Clark, said in an interview. “If we had those aircraft we ordered today in place tomorrow, we’d fill them up. It’s as strong as that.”
Waiting for Planes
Boeing’s haul on the first day pushes it into territory last seen a decade ago, when Emirates placed its first massive order for the 777X. The company’s flagship aircraft has been delayed by several years amid certification issues, though Deal said the current timeline that sees an entry into service in 2025 is attainable.
The action on the first day continues the dominant order pattern this year among airlines rushing to place giant orders as delivery slots become scarce. While that’s translated into ever-longer order books and backlogs for Boeing and Airbus.
Persistent delivery delays and other issues at Boeing would ordinarily improve bargaining power for customers, said Neil Glynn, managing director at research firm Air Control Tower. However, he said, the need for airlines to lower their carbon footprint and the availability of financing, is creating competition among airlines to lock down delivery slots.
Nevertheless, some industry veterans have begun cautioning that not all of these airlines will necessarily see through the gargantuan orders they’re placing today.
“There’s been a massive amount of activity from airlines to line up slots,” said Steven Udvar-Hazy, who runs Air Lease Corp. and helped place a deal on Monday for EgyptAir for 737 single-aisle Boeings. “Time will tell whether all these aircraft will deliver on time, and whether the airlines that ordered them will be able to absorb them at a later time. It would not be surprising if some of these aircraft would get deferred into a later time frame.”
Read More: Boeing Secures $52 Billion Jet Sale to Emirates: Dubai Latest
Boeing’s profitable run contrasts with Airbus’s first day of the show, which turned into a more muted performance. The European planemaker has few available delivery slots, and a tougher negotiating stance by engine supplier Rolls under its new CEO has made it harder to bring widebody deals across the finish line.
Over the weekend, Airbus looked to have the upper hand touting a giant order from Turkish Airlines for close to 350 aircraft. The accord hasn’t materialize at the event, though Airbus and its customer confirmed that they’d reached an accord in principle, with final details still be hashed out.
An order from Emirates, which likes to balance its fleet between the two main rivals, was also elusive for Airbus on the first day. Emirates has said that it’s in the market for more widebody aircraft, including Airbus aircraft. But Clark signaled that negotiations with Rolls remain a sticking point.
“We’ve still got to get over the last jump for the commercial terms of this, and we have to get through some of the engine issues that exist at the moment,” Clark said.
Talks With China
More good news, meanwhile, beckons for Boeing as it emerges from several years of shaky performance and makes strides in regaining the trust of major customers like Emirates. The new agreement brings the Gulf carrier’s commitment to the 777X to 205 planes, giving the program a shot of support after years of delays.
Boeing has also made progress in its effort to open the door to further jet sales in China. Deal said he’s optimistic about talks between presidents Xi Jinping of China and Joe Biden of the US scheduled to take place in San Francisco this week.
Bloomberg News reported earlier that China is considering lifting a freeze on jet purchases from the US planemaker as a signal of recent thaw between the two nations.
Read More: China Weighs Ending Freeze on Boeing With 737 Max Deal in US
--With assistance from Julie Johnsson and Guy Johnson.
(Updates with start of trading, analyst’s comment)
Author: Siddharth Philip and Leen Al-Rashdan