By Massoud A. Derhally
President Tim Clark says carrier waiting for new 777-300ER; order would be worth at least US$36bn
Emirates, the world's largest airline by international passenger traffic, is likely to order 100 planes or more from Boeing if the plane manufacturer upgrades the design of the wide-body 777 with a newer model, the Dubai-based carrier's president Tim Clark said.
"If Boeing produced the airplane that we want I can see easily that figure, bearing in mind that we've ordered 175 of them," Clark said in an interview with Arabian Business. "If it's as good as we hope it'll be, it's a natural thing to say 'yes we would probably roll over what we have to what they're offering with the new aircraft'."
If Chicago-based Boeing was to produce the next generation of the long-haul 777-300ER (Extended Range), its most profitable aircraft to date, an order of 100 jets from Emirates would probably cost more than US$36bn considering the current list price for the 777-300ER.
That would be Boeing’s largest single order after Emirates ordered 50 of the company’s 777-300ERs in November last year.
Emirates is the largest customer of the 777-300ER with 151 in its fleet or on order, and will begin retiring them in 2017. That is in addition to other models in its fleet like the 777-200, 777-300 and the 777-200LR.
"We have been trying to get Boeing to build the 777-9x and 8x and we are working closely with them to try and persuade them that it's a good idea to build it. We are not there yet," Clark said. "I guess if they had been there we would have done orders by now but they're not. The moment you read that Boeing are launching the new 777 you will probably find that Emirates is fairly close behind."
"Our airplanes start retiring in 2017, the ERs that we have today... they will all have to go and be replaced at some point, so there is a kind of a natural rollover in terms of what we do," Clark said. "Unless Airbus have a 350 programme - but the 350-1000 isn't of the size of the 777ER today or the new 777. So it's not something that is that attractive to us at the moment unless they change it."
The 300ER competes with Airbus SAS' A340-600HGW and the upcoming A350-1000, whose design Clark is unhappy with. Emirates has 70 A350s on order, 20 of which are A350-1000. In the last 12 months, Abu Dhabi-owned Etihad Airways cancelled orders for 13 A350-1000s.
"Emirates’ experience with aircraft in this class has led it to prefer Boeing,” said Richard Aboulafia, vice president of Fairfax, Virginia-based Teal Group, an aviation consulting firm. "The A340 was a disaster, and the A380 is only useful as a way of maximising scarce slots. The 777 has been a very big success for Emirates, and they’ve become the biggest customer. In other words, even though the A350-1000 looks promising, it’s very much in Emirates’ interest to motivate Boeing with the prospect of large numbers.”
Emirates uses the versatile 777-300ER to fly long haul flights to South America, the US, Asia and Australia.
Boeing's reluctance or delay to go forward with the 777-8x and 777-9x stems from a fear that the new models may stunt demand for the 747-8, analysts say. If the larger 777 comes online Emirates would most likely be its launch customer. The Dubai-based carrier's fleet strategy would also change.
"If that's good we may start offloading the later aircraft and flog them on the secondary air market to grab the new one because it has all the fuel efficiencies that we want. But we're not there yet," Clark said. "We've been working with them for a couple of years now and it's a little bit slow, they've got a lot of work to do. They still have got to put the 787 programme to bed."
Lufthansa Technik and Air FRance KLM Industries will overhaul and maintain these new Boeing 777's. Good for manufacturing like Boeing and engine makers like General Electric, Rolls Royce and Pratt and Whitney. More companies will battle for maintenance and overhaul contracts, and also engine and Inflight Entertainment and Passenger seats. GOod good.