Aviation

Record Breaking deals Day at Dubai Airshow 2017.

Dubai, UAE. November 15, 2017: The penultimate day of the Dubai Airshow saw two enormous aircraft purchase orders for both Airbus and Boeing, in one of the most exciting days in recent aviation business history.

Airbus revealed its largest single announcement ever this morning – a US$49.5 billion deal with Indigo Partners to purchase 430 aircraft in its A320neo family, described as Airbus’ largest ever single announcement.

Meanwhile Boeing inked a US$27 billion deal with carrier flydubai for 225 aircraft in its 737 MAX family, the largest-ever single-aisle jet order – by number of airplanes and total value – from a Middle East carrier.

With the Airbus order, Indigo Partners, a US-based private equity fund, has doubled its existing order of 427 A320 family aircraft. The fund owns four ultra low cost airlines, amongst which the new fleet will be shared as follows: Wizz Air (Hungary) 72 A320neo, 74 A321neo; Frontier Airlines (USA) 100 A320neo, 34 A321neo; JetSMART (Chile) 56 A320neo, 14 A321neo, and Volaris (Mexico) 46 A320neo, 34 A321neo.

Bill Franke, Managing Partner of Indigo Partners, and a man widely credited with creating the ultra low cost carrier sector, said: “This underscores our optimistic view of the growth potential of our family of low-cost airlines, as well as our confidence in the A320neo Family as a platform for that growth.”

The mammoth deal puts Indigo Partners among the biggest customers by order number for Airbus single-aisle aircraft.

John Leahy, COO, Customer, Airbus Commercial Aircraft, described the deal as ‘remarkable, and thanked his sales team. He said: “It’s gratifying that [this order] comes from a group of airline professionals who know our products as well as the folks at Indigo Partners do. We are proud to augment [Indigo Partner’s] airline fleets in Latin America, North America and Europe with the single-aisle aircraft that offers the lowest operating costs, longest range and most spacious cabin. ”

Increasing demand for air travel will push jetliner sales to more than 34,000 worldwide in the next 20 years, according to Airbus’s 2017 global market forecast. Almost three-quarters of that will be single-aisle models, the company said.

Most of the aircraft included in the Indigo Partners order will be delivered after 2021, with precise engine details as yet undecided.

Later on Wednesday, November 15, His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman of flydubai, signed an agreement between Boeing and flydubai for the 225 Boeing 737 MAX aircraft, saying: “Today’s order underlines the success of flydubai’s founding vision in changing the way people travel across the region. In under a decade, flydubai has extended its network to 97 destinations in 44 countries, transporting more than 44 million passengers. We look forward to the arrival of the new aircraft from 2019 in support of our future ambitions.”

The new Boeing order marks the third order placed by the airline with the US manufacturer in its eight-year history, following on from others placed in 2008 and 2013. The new crop of aircraft will be added to the flydubai fleet from as soon as 2019. The agreement includes a commitment for 175 MAX airplanes, and purchase rights for 50 additional MAXs. More than 50 of the first 175 airplanes will be 737 MAX 10s, launched earlier this year, and said to have the lowest seat-mile cost of any single-aisle airplane. The rest of the order comprises MAX 8 and MAX 9 aircraft.

Kevin McAllister, Boeing Commercial Airplanes President and CEO said the deal marked a great day, and secured hundreds of jobs across the region and in the US. “We are honoured that flydubai has selected to be an all-Boeing operator for many years to come. This record-breaking agreement builds on our strong partnership with flydubai. This caps a terrific week for all of us at Boeing.”

Both Airbus and Boeing also marked leasing deals with EgyptAir amongst today’s frenetic business.

Leasing company AerCap will be providing 15 Airbus A320neo aircraft to the north African carrier, for delivery in 2020.

AerCap is also behind a leasing deal to provide EgyptAir with six Boeing 787-9 Dreamliner aircraft, which will start operating in 2019. AerCap is the world’s largest lessor of the Airbus A320neo; and the largest customer of the Boeing 787, with 116 on order and owned.

Michele van Akelijen, Managing Director of organisers, Tarsus F&E LLC Middle East, said: “Today’s most memorable deals underline that Dubai Airshow is the place where the global industry comes to do business. These deals are certainly breathtaking in their scope and size. The rapidly growing aviation sector here in Dubai supports more than a quarter of a million jobs and contributes more than US$22 billion to the local economy – or 19% of total employment in Dubai, and 28% of the city’s GDP. These figures will continue to grow given all the business we are seeing this week.”

Related Topics:airbus Boeing Dubai Airshow

Aviation

Boeing to Slash 17,000 Jobs Worldwide Amid Ongoing Factory Strike

Boeing to Slash 17,000 Jobs Amid Ongoing Factory Strike

Boeing, one of the world’s largest aerospace manufacturers, is facing a severe crisis. The company announced on Friday that it will lay off 17,000 employees—roughly 10% of its workforce.

This decision comes amid a prolonged strike, production delays, and ongoing safety concerns with its aircraft. Kelly Ortberg, Boeing’s CEO since August, delivered the news, stating, “Our business is in a difficult position, and it is hard to overstate the challenges we face together.

Beyond navigating our current environment, restoring our company requires tough decisions, and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term.”

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Boeing has been struggling financially, with the last reported profit in 2018. The company’s largest union, with 33,000 members, has been on strike for nearly a month after rejecting a labor deal. The ongoing walkout is reportedly costing Boeing around a billion dollars each month as negotiations remain at a standstill.

Compounding these issues, Boeing’s much-anticipated boeing 777x wide-body plane is now six years behind schedule, with deliveries postponed until 2026. This follows the discovery of structural damage during flight tests. Boeing also announced it will stop manufacturing its commercial 767 freighters after fulfilling its remaining orders by 2027.

Financially, the company expects to report a significant third-quarter loss—nearly $10 per share—and a total cash outflow of $1.3 billion. boeing new aircraft commercial airplane unit faces a $3 billion pretax charge, while its defense business will absorb an additional $2 billion hit.

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The strike has severely impacted production at key boeing facilities, particularly in Seattle, where half of the company’s nearly 150,000 employees work. Since 2019, Boeing has lost approximately $25 billion.

Ortberg was brought in over the summer to help the company regain public trust following safety concerns, especially surrounding the 737 Max line, which was involved in two deadly crashes. Earlier this year, a separate incident involving a panel popping off a 737 Max mid-flight reignited concerns. A Federal Aviation Administration investigation following the event found that Boeing had failed 33 out of 89 product audits.