Emirates Airline dangling 100-airplane order in front of Boeing, Airbus

An analyst’s report says Emirates Airlines plans to buy 100 Dreamliners from Boeing, most of them 787-10 models made at the company’s North Charleston campus. Other reports, however, have Emirates leaning toward an Airbus purchase.

Even as Boeing Co. is set to release its latest outlook for commercial airplane demand Thursday, a tug-of-war with competitor Airbus over what could be one of either manufacturers’ largest orders is playing out in the aerospace industry press.

Dubai-based Emirates Airline is in the market for between 70 and 100 wide-body planes to replace its aging fleet and take on new, mid-range routes over the coming years.

Saj Ahmad, chief analyst for Strategic Aero Research, said in a note to clients of the U.K.-based airline industry group that Boeing has the inside track on selling 100 Dreamliners to the government-owned Emirates. Ahmad said this week that most of the sales would be 787-10 models, which will be made exclusively at Boeing’s North Charleston campus, along with some of the slightly smaller 787-9 jets.

“It would be a massive shot in the arm for Boeing South Carolina,” Ahmad told The Post and Courier, adding that Emirates is impressed with the North Charleston facility’s ability to produce all three Dreamliner variants.

But Tim Clark, president of Emirates Airlines, says not so fast.

“I don’t know where that’s coming from,” Clark told aviation industry newsletter Leeham News and Comment this week.

“If anything, the (787-10) is not coming up with the thrust requirements that we need,” Clark told Leeham. “We’re working with Boeing on that, whereas the A350-900 has got bags of thrust.”

Emirates last year canceled an order for 70 Airbus A350 wide-bodies, a chief competitor to the Dreamliner, after considering the lighter 787-10 as a possible fleet replacement.

“Emirates, to date, has never reordered an airplane they canceled on,” Ahmad said Wednesday. “Frankly, this is Boeing’s order to lose.”

Flightglobal, another aviation industry publication, said Tuesday that Emirates might revive the Airbus deal if Boeing can’t respond to Clark’s concerns over hot-weather performance of the 787-10.

“While impressed with the operating economics of the 787-10 . . . Clark is concerned that Dubai’s harsh operating environment will prevent the aircraft (from) being able to carry sufficient payload on critical missions,” Flightglobal reported.

Clark is quoted as calling the 787-10 “a brilliant airplane,” but he added “there’s a reticence there from Boeing” to address the weather concerns.

“Once you start going for a higher thrust you need more changes, fan changes — the whole thing changes,” Clark told Flightglobal.

Boeing spokesman Doug Alder declined to comment on the reports, saying “we do not discuss conversations that we have with any of our customers.” An Emirates spokesman could not be reached for comment.

Ahmad said Emirates plans to announce its order during the Dubai Air Show, which takes place in November.

“Deliveries are poised for the end of 2018 with movement earlier if needed,” Ahmad said in the note to Strategic Aero Research clients.

Ahmad’s note said Emirates wants to move its hub to Dubai World Central Al Maktoum International Airport, which opened in 2010 about 23 miles from Dubai. Emirates currently calls the 55-year-old Dubai International Airport, one of the world’s busiest, its hub.

Ahmad said the move, planned for early next decade, “could truly unlock (the airline’s) growth potential” because of the airport’s five-runway complex and ability to handle 160 million passengers per year.

The new airport “can provide the additional slots, gate space and frequencies that Emirates craves to reach its growth potential and double its current destinations from around 165 today to more than 300,” Ahmad said.

Clark did not address any potential hub moves, but said he hopes to make a decision on which plane to order by the end of the year.

The maneuvering could be a case of Clark playing Boeing and Airbus off each other to get the best deal.

“Airlines always do what they can to make the best deal, and using one or the other OEMs (original equipment manufacturer) as a stalking horse certainly is not unknown,” Scott Hamilton, editor for Leeham News and Comment, told The Post and Courier. He added that Clark previously has been unhappy with both manufacturers’ products.

“Technical is certainly going to be the driver, but look for Clark to turn the screws on pricing,” Hamilton said. “Airbus generally has more room to maneuver on price than Boeing because of the deferred production cost overhang of the 787.”

Boeing has had 1,105 Dreamliner orders through May. That includes 140 orders for the 787-10, the longest version. Design and engineering of that model is months ahead of schedule, with the first delivery planned for the first quarter of 2018.

To date, the largest orders for the 787-10 have been 30 apiece from Air Lease Corp., an aircraft leasing company in the United States; Etihad Airways of the United Arab Emirates; and Singapore Airlines.

Japan’s ANA Holdings Inc, is the biggest Dreamliner owner with 83 planes.

Airbus has had 780 orders for its A350 series, most of them for the A350-900 model.

Demand for commercial planes such as the Dreamliner is outstripping supply, Randy Tinseth, Boeing Commercial Airplanes’ vice president of marketing, told Airways News.

“In 2015, passenger traffic growth has been very brisk (at) 6 percent, equivalent to an additional 150 million passengers in just one year, and 900 new aircraft per year are needed to cope with this demand,” Tinseth said.

In spite of an uneven global economic recovery, particularly in Russia, Europe, and Brazil, Boeing says the commercial market will continue to deliver exponential growth, both in the short and long term, Airways News reported this week. The industry journal cited increasing demand from regions such as the Middle East and Asia — particularly China — and the boom in low-cost carriers as drivers of the optimistic forecast.

Boeing is scheduled to release its market demand study Thursday.

Contact David Wren at 937-5550 or on Twitter at @David_Wren_