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|17 May, 2018

Dubai Aerospace in talks with Airbus, Boeing to place huge order for 400 jets

DAE, controlled by the government of Dubai, is interested in buying Airbus A320neo family and Boeing 737 MAX jets

The first Boeing 737 MAX 7 is unveiled in Renton, Washington, U.S. February 5, 2018. Image for illustrative purposes.

The first Boeing 737 MAX 7 is unveiled in Renton, Washington, U.S. February 5, 2018. Image for illustrative purposes.

REUTERS/Jason Redmond

DUBAI- Dubai Aerospace Enterprise, one of the world's largest aircraft lessors, is in talks to buy 400 jetliners from Airbus and Boeing and is prepared to expand its fleet through acquisition if talks fall through, its chief executive told Reuters on Thursday.

The move comes months after a leading U.S. airline investor orchestrated a record deal last November for a group of airlines to buy over 400 planes from Airbus as economists project strong growth for air travel. 

Dubai government-controlled DAE is interested in buying single-aisle Airbus A320neo-family and Boeing 737 MAX planes following its acquisition last year of Dublin-based lessor AWAS, DAE Chief Executive Firoz Tarapore said.

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Any deal would not necessarily be evenly split between the two planemakers, Tarapore said, adding DAE was "nowhere near where we thought we would be" in finalising an order.

"We are not happy with the price," he said in an interview at DAE's offices in Dubai's financial district.

A 400 single-aisle jet order would be worth over $40 billion at list prices, though discounts are common for large orders.

Boeing BA.N declined to comment and Airbus did not immediately respond to an emailed request for comment.

Both manufactures are sold out for several years and freeing up production slots would be difficult for a large order.

Tarapore told Reuters in June 2017 that DAE was considering a "large order" for more than 23 new aircraft with deliveries to start from 2019.

DAE would look at other options to acquire new aircraft if it does not reach an agreement with Airbus or Boeing, which Tarapore said could include acquiring a rival in order to get access to its order book for aircraft.

DAE jetted into the top tier of aircraft lessors last year when it acquired Dublin-based AWAS, the industry's tenth biggest firm at the time. The acquisition tripled DAE's portfolio to around 400 aircraft worth over $14 billion.

(Reporting by Alexander Cornwell; Editing by Mark Potter and Tim Hepher) ((Alexander.Cornwell@thomsonreuters.com;))