Dubai's DAE cancels five Boeing freighter planes

Dubai Aerospace Enterprise pulls half of its order for 10 747-8 aircraft from US company

Boeing 747-8 freighter jets.

Boeing 747-8 freighter jets.

A Dubai-based customer has cancelled part of an order for 10 747-8 freighters from US plane manufacturer Boeing.

Dubai Aerospace Enterprise (DAE) cancelled five of its 10 orders for 747-8 freighters. DAE also has orders for seven 777 freighters, Reuters reported, citing the plane maker.

According to latest order information posted on Boeing's website, customers have cancelled orders for six planes worth nearly $1.9bn at list prices, and booked orders for two planes worth $700m.

In its latest tally, Boeing showed cancellations for five 747-8 jumbo jets and a 767. The new orders were for two 747s.

Reuters said Boeing declined at customer request to identify which company cancelled the 767 order and which had booked the orders for two 747s.

The Seattle Times reported that Kazakhstan flag carrier Air Astana cancelled the 767 order. Air Astana still has on order four 767s and three 787s.

DAE cancelled all its remaining Airbus orders worth $5.8bn last year. DAE cancelled Airbus orders worth $4.7bn, as well as a slew of Boeing orders, in March 2011 and entered negotiations with both planemakers about the rest of its orders.

DAE was formed in 2006 in a collaboration between several Dubai names including sovereign wealth arm Investment Corporation of Dubai, developer Emaar and DIFC Investments.

The company ordered more than 200 aircraft during an industry boom in 2007 but its ambitions came under the spotlight during the global financial crisis.

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Posted by: RaOne

Paolo...this is no such simple as you state...we are not talking about grocery business here... contracts valuing $10 billion + ...they have many clauses for cancellation which involves penalties...

DAE as a business entity decided to pay the penalty for cancellation instead of going ahead due to their current business state.

And such things happen all the time...even within your western states....

Posted by: RBH

Well said.

Posted by: Paolo C

This is a good policy. First order, then cancel a little, after go into negotiations in order to lower further the price. Let also westerners use the same kind of policies toward arab states, then lets see what the arabs have to say about that.

Posted by: procan

Paolo that strategy is dangerous in the big leagues, I am sure the Middle East Airlines know this and will not entertain such a strategy . Boeing and Air Bus are capable players and could employ similar tactics creating a difficult Bussiness environment

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