Airbus on Thursday finally landed a 15-jet order from Emirates airline after a publicized rift over engine issues earlier in the week. Dow Jones rival Boeing has so far dominated the order book at the Dubai Airshow. Boeing stock rallied 5% so far this week through Thursday's close.
Emirates, Airbus Agree To Order
Airbus on Thursday sealed a $6 billion deal with UAE-owned Emirates for 15 additional A350-900 aircraft. The new-order backlog for Emirates — the largest airline in the Middle East — to 65 A350s, the airline announced.
"We will work closely with Airbus and Rolls-Royce to ensure our aircraft deliver the best possible operating efficiency and flying experience," Sheikh Ahmed bin Saeed Al Maktoum, chairman and CEO of Emirates said in the announcement. The airline committed to $58 billion in orders for 110 additional planes at the Dubai Airshow so far.
During negotiations on Tuesday, Emirates airline had signaled it would hold off on any new Airbus A350 orders, the AP reported.
Tim Clark, president of Emirates, hinted the engine supplied by Rolls-Royce was defective in comments to journalists at the airshow and criticized its high maintenance costs, saying it is "not doing what we want."
"If the engine did what we wanted it to do and Rolls-Royce knows what we want it to do, and so does Airbus, then we would reenter it into the assessment for our fleet," Clark said.
Clark told reporters Emirates was prepared to order between 35 and 50 jets if Rolls-Royce improved engine durability and maintenance costs, Reuters reported.
Emirates airline is the world's largest operator of Airbus A380 superjumbo aircraft. Airbus ended production on the double-decker jet and stopped deliveries in 2021. However, Emirates plans to keep flying the A380 - potentially until the early 2040s - and will start phasing out the aircraft in the 2030s.
Emirates on Wednesday signed a series of deals worth $1.5 billion to maintain its A380 fleet and improve the lifespan of the aircraft, Simple Flying reported. This year, the airline began deploying refurbished A380s through its $2 billion internal retrofitting program. All 67 A380s assigned for maintenance will return to service by 2024.
Airbus Orders
On Wednesday, Airbus reached a provisional order with Ethiopian Airlines for 11 A350-900 jets. The deal includes an option to purchase six additional aircraft. It brings Ethiopian Airlines' orderbook for the A350 to 33 planes.
Ethiopian Airlines currently operates a fleet of 20 A350-900s and is Africa's largest A350 customer.
The plane maker secured an order for 30 additional A220-300 aircraft from airBaltic on Monday. The order increases that airline's total order book to 80 jets, making the Latvian airline the largest A220-300 customer in Europe.
Boeing Lands Ethiopian Airlines Deal
Ethiopian Airlines agreed Tuesday morning to order 11 Boeing 787 Dreamliner jets and 20 737 MAX airplanes, which included an option to buy 15 additional Dreamliners and 21 extra 737 MAXs. The deal marks the largest purchase of Boeing airplanes by a company based in an African country, Boeing said during the announcement.
Ethiopian Airlines CEO Mesfin Tasew said the order enables the airline to modernize and increase its fleet to support the company's growth plan.
The airline has more than 80 Boeing jets in its fleet and touts the largest fleet of Dreamliners in Africa. The new 737 order marks a healing of relations between the two companies, after an Ethiopian 737 MAX crashed in March 2019 and killed everyone on board. The crash grounded Boeing planes worldwide, due to Boeing design flaws playing a key role in that accident, and in another involving Indonesia's Lion Air airlines a year earlier.
"We have checked and confirmed that the design defects of the aircraft have been fully corrected by Boeing and we have renewed our confidence in the aircraft," Tasew told Bloomberg.
Dubai Order Frenzy
At Monday's start of the Dubai show, Emirates airline announced a $52 billion order for 95 of Boeing's widebody jets. Emirates is the world's largest operator of Boeing 777 aircraft. The order included 55 Boeing 777-9s, 35 777-8 jets and five 787 planes, bringing Emirates' total 777x order backlog to 205 planes and its 787 backlog to 35 jets, respectively. Emirates currently has nearly 150 777 jets in its fleet, according to Boeing.
The airline ordered 202 GE9X engines to power the additional 777X aircraft. Emirates expects the first 777-9 to join the fleet in 2025 from its previous order for 115 units. The additional jets from Monday's order should arrive in 2035. Emirates expects deliveries for the 777-8 in 2030.
Meanwhile, FlyDubai announced a plan to purchase 30 Boeing 787-9 Dreamliners, marking the first order for widebody aircraft. The airline currently operates a fleet of 79 aircraft made up entirely of 737s, with an order backlog of 137 Boeing 737s. FlyDubai plans to use the 787s to open new routes and increase capacity on its existing offerings. The order is valued around $11 billion, the AP reported.
Additionally, SunExpress, a joint venture between Turkish Airlines and Lufthansa, committed to purchasing up to 90 Boeing 737 aircraft, according to a Monday announcement. The SunExpress agreement includes an order for 28 737-8s, 17 737-10 models and an option to purchase up to 45 additional 737 MAX planes.
Boeing Stock
Boeing stock faded 1% Thursday, erasing its slight gain from Wednesday. BA stock remains up 5.1% for the week, after rallying Monday on the Dubai orders and reports China is considering its own jet commitment.
Boeing shares are testing resistance at their 200-day line and trading above their other key moving averages. Boeing stock jumped 8.5% so far this year through Thursday's close.
Airbus, which trades in American depositary receipts (ADRs) under the ticker EADSY, climbed less than 1% Thursday after a slight dip Wednesday. EADSY stock is up 20.6% this year and approaching a 36.73 entry in a double-bottom base.
Air Lease, which provides jet leasing and fleet management services, eased 1.5% Thursday. Shares rose 1.8% Wednesday after adding 2.4% Tuesday.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
