Emirates finalizes massive Boeing 777X order
The world’s largest airline by international traffic wants 115 400-seat 777-9Xs and 35 smaller 777-8Xs. The deal, first announced in November, is the largest single order in aviation history.
Emirates, the largest airline by international traffic, signed off on an order for 150 Boeing 777X planes to renew and extend what is already the world’s largest widebody fleet.
The order is worth $56 billion at list prices, but airlines get large discounts so the real price is likely around $31 billion, according to data from aircraft valuation firm Avitas.
The deal for 115 400-seat 777-9Xs and 35 smaller 777-8Xs firms up a commitment announced last year and comes with an option for 50 more aircraft taking its value to $75 billion at list prices, Dubai-based Emirates said in a joint statement with Boeing.
The first aircraft are due for delivery in 2020.
The largest single order in aviation history positions Emirates as lead operator of the first twin-jet able to haul a jumbo’s payload, aided by a revamp with new General Electric engines and Boeing’s largest-ever wing.
The Gulf carrier, the No. 1 operator of both the current-generation 777 and Airbus A380 superjumbo, is splurging on capacity as it builds Dubai into the leading hub for long-haul transfer flights.
The 777X order was initially announced at the Dubai Air Show in November, and is being firmed up days before next week’s Farnborough expo outside London.
While financing options haven’t been announced, some U.S. carriers led by Delta Air Lines have protested government-backed competitors, including Emirates, receiving loan guarantees from the U.S. Export-Import Bank, which helps foreign companies buy American goods. Atlanta-based Delta has said the bank’s charter should expire at the end of September unless the 80-year-old lender drops its support for such purchases of widebody jets.
“Emirates is backed not only by its government, but also by our own,” Delta Chief Executive Officer Richard Anderson told the House Financial Services Committee on June 25. “Emirates can devote a substantial portion of its Ex-Im sponsored savings to enhance its competitive position vis-à-vis U.S. carriers.”
At the end of March, the bank had at risk $32 billion in support of widebody jets, or 28 percent of total outstanding loans, guarantees and other financing, according to a report Wednesday from the U.S. Government Accountability Office. The value of such deals generally increased from fiscal year 2004 to 2012, according to the report.
“The GAO’s recent study illustrates why the Export-Import Bank is in need of reform,” said an unattributed statement posted on Delta’s website. “The bank devotes too much of its funds to finance widebody jets purchased by foreign competitors of U.S. airlines and supports too many foreign airlines that simply don’t need the help,” it said.
Delta spokesman Trebor Banstetter said the company didn’t have a comment on Emirates’ purchase of the 777s. Ex-Im officials didn’t respond to requests for comment.
It’s not known whether the bank will play a role in the purchase. Airlines don’t usually weigh financing options until the planes are prepared for delivery.
“They typically wouldn’t be arranging financing this far in advance,” said Boeing spokesman Tim Neale. He said Boeing’s customers usually finance most of their purchases by tapping private markets or by using their own cash.