Wednesday, Jun 13, 2012
(This story was originally published Tuesday)
-- Emirates CEO: No plans for new orders at Farnborough Air Show
-- Would be interested in new version of Boeing Co.'s 777 aircraft
-- To take A380s out of service in stages to fix wing bracket cracks
By Jeffrey Ng and Yajun Zhang
BEIJING--Emirates Airline won't place any orders at the Farnborough Air Show in July, Chief Executive Tim Clark said Tuesday in comments likely to add to rising concerns over the aviation industry's outlook at a time of high operating costs and intense competition.
"No orders at all," Mr. Clark told Dow Jones Newswires in an interview on the sidelines of the International Air Transport Association's annual general meeting in Beijing.
The airline already has 230 planes on order worth around $62 billion, so "that's probably enough at the moment," he said, adding that Emirates' current order book will last through 2022.
Although Mr. Clark cited the huge backlog as the main reason for the decision, it is an indication that even the world's richest airlines are not completely immune to the industry-wide slowdown.
In recent years, Middle Eastern carriers -- with buying power swelled with the help of oil revenue -- dominated the three main annual air shows in Dubai, Farnborough and Le Bourget, placing huge orders with Boeing and rival Airbus.
But high oil prices and reduced demand for premium services have exacted a toll amid the global economic downturn.
Emirates itself recently posted a 72% drop in profit for its fiscal year ended March 31, with fuel costs surging 44%.
On the bright side, however, Emirates' significant order books underscore its ambitions of further developing Dubai's status as an aviation hub.
The airline and its regional rivals -- such as Qatar Airways and Abu Dhabi's Etihad Airways -- have capitalized on their location to use the new generation long-range aircraft to funnel business through their Middle East hubs.
Emirates, for instance, is the world's biggest operator of the Airbus A380 superjumbo.
Also Tuesday, Mr. Clark said that Emirates would be interested in a new version of Boeing Co.'s 777 widebody aircraft as it would help with the airline's plan of retiring older airplanes.
"Hopefully [Boeing] will build a new 777 [with] which we could replace [the older planes]," he said. "If they had done that at Farnborough, maybe we [could have considered], but they haven't."
Mr. Clark said also that Emirates will take parts of its fleet of 34 A380s out of service for eight weeks at a time starting in March next year through November 2014 to fix cracks in brackets inside the wings.
The fixes will also need to be done on new A380s being delivered later this year, he said.
The wing cracks, first found on a plane operated by Qantas Airways Ltd. last year, are proving to be a financial handicap to Airbus and have tarnished the image of the double-decker plane that has been receiving rave reviews from passengers.
"There has been a lot of damage caused" by the defects, Mr. Clark said. The company is in discussions with Airbus on possible compensation.
Write to Jeffrey Ng at jeffrey.ng@dowjones.com
(END) Dow Jones Newswires
13-06-12 0346GMT
