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Emirates places $35 billion Airbus order

Gulf's biggest carrier buys 70 A350s, takes options on 50 more

Dubai-based airline Emirates picked the Airbus A350 airliner over Boeing's 787 Sunday in orders potentially worth $35 billion, grabbing center stage on the first day of the Dubai Air Show.

Deals this week could make 2007 the biggest year in history for planemakers, as soaring oil prices drive orders for new, more fuel-efficient airliners such as the A380 superjumbo and Boeing's mid-sized 787 Dreamliner.

The Gulf's biggest airline bought 70 A350s and took options on 50 more while extending its lead as the biggest buyer of the Airbus A380 superjumbo by adding another 11.

Emirates' orders also included 12 long-range 777-300ERs from Boeing worth $3.2 billion.

The industry is in the third year of a record level of demand, spurred by new aircraft as well as the spread of budget airlines.

Boeing's biggest deal came from Qatar Airways, which said on Sunday it had ordered 57 Boeings, including 30 of the 787 Dreamliners, in a deal worth $13.5 billion, excluding options.

The state-owned carrier will also buy 27 Boeing 777 aircraft, including seven freighters, CEO Akbar al-Baker told reporters. The airline had an option to buy 30 more 787s and five more 777s, he said.

Boeing entered the air show leading Airbus in their annual race for orders but the gap narrowed on Sunday.

While the 787 is already the fastest-selling new Boeing in history, the Emirates order for the A350 XWB (Xtra Wide Body) is a major boost for the new Airbus plane, which has been the subject of fitful design changes over the last two years.

The battle between the 787 and the A350 for sales to Emirates was being closely watched by industry analysts. "The 787 is a smaller aircraft with fewer seats," said Tim Clark, Emirates airline president, explaining the decision to go with the Airbus.

He added that a stretched version of the 787, which some airlines have urged Boeing to launch, was not being offered.

In connection with the Emirates deal, British aircraft engine maker Rolls-Royce said it would supply engines for the A350s bound for Emirates in a deal that could be worth $8.4 billion if Emirates firms all options.

The air show runs until Thursday, and industry sources said Dubai Aerospace Enterprise, Saudi Arabian Airlines and Air Arabia are among those expected to announce orders this week. The biennial Dubai event saw deals worth $21 billion announced two years ago.

Also at the Dubai event, Saudi Arabia's Interior Ministry said Sunday it had agreed to acquire 40 helicopters from United Technologies' Sikorsky Aircraft, including 16 of its S-92 helicopter. The deal also includes 15 S-76 multi-mission helicopters and nine Schweizer 434 training helicopters.

"The Middle East has become a significant region for S-92 helicopters, and Sikorsky is excited about the potential for this program becoming the model for other aviation programs in the kingdom," Sikorsky president Jeffrey Pino said in a statement.

The ministry said it plans to use the helicopters on missions including search and rescue, fire fighting, medical services and security and traffic surveillance.

Airbus confirmed that Riyadh-based National Air Services (NAS) had placed a firm order for 20 Airbus A320s. NAS, operator of both a luxury and a low-cost airline, had signed a letter of intent for the purchase at the Paris air show in June.

United Arab Emirates-based Rak Leasing Co. said Sunday it was in talks with Boeing to buy as many as six aircraft. The order could include Boeing's 737-900, 777 and 747 freighter models, said Gilena Seliman, managing director of Rak Leasing.

Air Arabia, the Middle East's largest low-cost carrier, said Sunday it would raise about $1.6 billion in conventional and Islamic loans and bonds to finance the purchase of about 40 short-haul aircraft. "We'll make an order in the next couple of days," Air Arabia chief executive Adel Ali told Reuters. "It will be in the region of 40 planes." Each plane would cost about $50 million, he added, indicating a total cost of about $2 billion. Air Arabia said last week it was looking to buy between 34 and 50 aircraft and would choose this month between the Boeing 737 and the Airbus A320. The carrier would borrow about 80 percent of the cost of the planes in a combination of loans and bonds, Ali said.

Two Dubai-based investment firms said Saturday they had acquired a stake in Empire Aviation Group, which has exclusive rights to sell Hawker Beechcraft business jets in a number of Gulf and Asian markets. Dubai International Financial Center Investments and Zabeel Investments did not say how much they paid for the "strategic stake" in an e-mailed statement. Empire was founded this year in the United Arab Emirates to help develop the regional market for business aviation services, now accounting for only 2 percent of the global private jet market, Empire said in a statement. The group signed an agreement with aircraft manufacturer Hawker Beechcraft at the Paris Air Show this year, allowing it to sell its Beechcraft and Hawker jets in the Gulf Arab region and Pakistan, with some exclusive rights, it said. Hawker Beechcraft is owned by Canada's Onex Partners and GS Capital Partners, which bought the business from Raytheon in a deal that closed this year. Zabeel, a real-estate development and private-equity firm founded in Dubai in 2006, was part of Dubai's purchase of a 3.12-percent stake in Airbus parent EADS in July.

State-owned Dubai Aerospace Enterprise (DAE) said Sunday it plans to invest several billion dollars in India's aerospace industry to tap growing demand for air travel. "India's aviation sector has great promise and is accelerating with significant growth in domestic and international traffic," DAE chief executive Bob Johnson was quoted as saying. DAE would invest in aircraft leasing, maintenance, airports and pilot training, the company said. DAE will also seek to build an aerospace research and development center in India.

Marseille,11 19 2007
The Daily Star
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