Tuesday, Jul 20, 2004
Etihad Airways, the Abu Dhabi-based airline that only started flying last November, on Tuesday astonished the aviation industry by placing one of the biggest ever orders for long-haul aircraft, including four Airbus A380 superjumbos.
It handed Airbus its latest airshow coup by signing a memorandum of understanding with the European aircraft maker for 24 wide-bodied aircraft with options on a further 12 in a deal valued at $7bn at list prices, before heavy discounts.
The airline had been in negotiations with Airbus and its rival Boeing for the past year.
Trading as the national airline of the United Arab Emirates but financed by the emirate of Abu Dhabi, the carrier aims to become the third airline to seek to establish a mega-hub in the Middle East.
Among its competitors are Emirates, based only 100km away along the Gulf coast in Dubai, and Qatar Airways.
All three states are seeking to use the aviation sector as a driver for developing infrastructure, tourism and economic development for a future era when they can no longer rely so heavily on incomes from the oil and gas sector. They are seeking to act as new aviation and commercial hubs between Europe, Asia and Africa.
The trio also face competition from Air Arabia, a no-frills operator, and from Gulf Air.
Both Emirates and Qatar Airways are among the launch customers for the 555-passenger A380 superjumbo, which will become the world's biggest commercial jet when it enters service in 2006.
The growth of the state-owned Middle East carriers has created unease among competing airlines, notably Qantas of Australia and Air France, which have been alarmed at the surge in capacity and what they claim is the unlevel playing field created by the state support.
Etihad was so concerned to jump the queue and become an early operator of the A380, that it has agreed to buy Airbus's first four test aircraft, which will start to be delivered to Etihad in 2007. Deliveries of the 24 aircraft will start in January 2006, with 22 to be delivered by the end of 2007 and two in 2008.
Sheikh Ahmed Bin Saif al Nahyan, chairman of Etihad Airways, said: "I cannot recall a time in airline history when a start-up operation, barely eight months old, has had the confidence, resources and ambition to place orders for up to 36 new wide-bodied aircraft."
The memorandum of understanding is for 12 A330-200s, four A340-600s, four of the ultra long-haul A340-500s, the aircraft with the longest range currently flying, as well as the four A380s.
Etihad flies to London Heathrow, Damascus, Beirut, Amman, Colombo, Bangkok, Munich and Geneva.
Kevin Done in Farnborough
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