Emirates Nears Deal on Boeing 777X, 787 Deliveries

(Bloomberg) — Emirates has decided on its preferred mix of new Boeing Co. wide-body planes, with the focus likely to be on smaller aircraft rather than jumbo jets following a slump in demand amid the Covid-19 pandemic.



A Boeing Co. 777X airplane sits on the assembly floor at at the company's facility in Everett, Washington, U.S., on Wednesday, March 6, 2020.


© Bloomberg
A Boeing Co. 777X airplane sits on the assembly floor at at the company’s facility in Everett, Washington, U.S., on Wednesday, March 6, 2020.

The Dubai-based carrier has been pushing to swap more of Boeing’s behemoth 777X jets — of which it has ordered 115 — for 787 Dreamliners. Emirates has finalized its position on the composition of the intake, Chief Operating Officer Adel Al Redha said in an interview Thursday, declining to provide details.

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Negotiations are ongoing, including on the timing of the plane deliveries, Al Redha said. Emirates prefers to take the smaller Dreamliner sooner rather than later as it “offers better seat capacity” at a time when demand for international travel is flagging, he said. Boeing wants to hand over the larger 777X first, the COO said, in line with an agreement made before the coronavirus tore up the plans of airlines around the world.

“I think Boeing would prefer to deliver the 777s before 787 because that is a new program for them,” Al Redha said. The Chicago-based planemaker declined to comment.

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Emirates is particularly affected by a downturn in demand for air travel as the largest long-haul carrier in the world, typically operating more than 500 flights a day and using its Dubai hub to connect travelers from Europe and the U.S. to Africa and Asia. Its swollen order book also includes Airbus SE A380 superjumbos and 50 smaller A350s, which are now the subject of separate delivery talks.

Emirates was supposed to take delivery of three A380s in June, but the carrier agreed with Airbus to delay these until later this year, the COO said. The 777X’s commercial debut was originally set for 2020 but has been postponed to 2022 as the manufacturer faces regulatory scrutiny and uncertain demand. Emirates is scheduled to take the delivery of the first of 30 787s in 2023.

“It’s a very complicated equation at this time,” Al Redha said. “We don’t want to dump capacity in the airline when the airline can’t absorb capacity.”

The discussions between Emirates and Boeing are being echoed in talks between airlines and manufacturers worldwide, as carriers are forced to reexamine expansion strategies to adapt to the post-pandemic environment. Travel bans to contain the coronavirus all but grounded air traffic for much of the first half of the year, and government reopening plans are in the throes of disruption due to fresh restrictions to respond to new surges.

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The COO also said:

Emirates expects to increase its network to 80 destinations in SeptemberWhile 70% of the airline’s traffic was transfers before the pandemic, its now about a 50% split with point-to-point journeysOn flights to Israel: “No question about it, airlines from both sides will want to examine the opportunity,”Difficult to predict start dates and frequencyAirline currently has 115 daily flights and average load factor exceeds 40%

(Corrects in second and third paragraphs to clarifty that Emirates has finalized its own planning and that negotiations with Boeing are ongoing)

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