The Truth Is That Emirates Net Canceled $20 Billion Of Aircraft Orders At The Dubai Airshow—Contrary To Media Headlines.

This year’s Dubai Airshow was mostly a PR demonstration to the market from Middle Eastern carrier’s that big orders are still rolling in and the aviation hub of Dubai continues to expand. The reality is that despite headlines and fanfare of Emirates placing large aircraft orders, these actually represent multi-billion-dollar cancelations. The orders are not new, they are in fact putting pen to paper on previously announced deals, and in-fact represent a contraction of not only aircraft numbers but additionally the actual size of the aircraft ordered.

In summary, Emirates have confirmed and reduced four separate aircraft orders at the Dubai Airshow. The UAE carrier confirmed its A380 cancelation of the final 39 frames by ordering 50 A350s—this order additionally led to the further cancelation of a commitment to buy 40 A330neo aircraft which had originally been announced to replace the A380 cancelation. Additionally, Emirates reduced not only the size of their 787 order but also the size of the aircraft, opting for a smaller 787-9 version rather than the stretched 787-10 variant. Lastly, the 787 order also led to a reduction of 30 777x aircraft that were previously on order.

If there is one thing that Emirates do very well, it is PR. I wrote earlier this week how we shouldn’t expect any major aircraft orders beyond the touted Air Arabia deal at this year’s Dubai Airshow.

Air Arabia did indeed order 120 Airbus A320neo family aircraft, and the order was quickly followed by headlines from Emirates that they had placed two large jet orders. The first was for 50 Airbus A350 aircraft at a list price of $16 billion.

The subsequent day saw Emirates ink an order for 30 Boeing 787-9 aircraft worth $9 billion.

Both orders represent a huge net-cancelation in aircraft purchases for the UAE’s largest airline.

Firstly, the Airbus A350 order has been pushed out to the press with much fanfare as Emirates had originally committed to purchasing only 30 A350 aircraft and now they have increased that order by 20 more planes. Therefore, realistically, the order was only for 20 new aircraft when compared to what Emirates had previously announced. However, the details illustrated that the original order was for 30 A350-900 jets and 40 A330neo aircraft, in an original order worth $21.4 billion.

Therefore this Emirates order reflects a decrease from the original 70 wide-body aircraft ordered at a list price of $21.4 billion to a new total of 50 aircraft with a $16 billion list price. What’s more is that the originally announced order for 70 Airbus aircraft was itself, already replacing a canceled order for the world’s largest operator of the A380. The largest passenger aircraft in the world is the mainstay of the Emirates fleet, but with Airbus ending production in 2021 Emirates chose to reduce its final deliveries of the super jumbo from 162 to 123 aircraft.

Emirates chairman Sheikh Ahmed bin Saeed Al Maktoum did not publicly comment on the A330neo cancelation, simply saying “the A330neo is not part of the discussions” at the Airshow. Emirates did not respond to my request for a comment on the Airbus order adaption.

The second major announcement from Emirates was an order of 30 787-9 aircraft. The carrier had also previously announced its intentions to order 40 of the larger 787-10 variant of Boeing’s Dreamliner through a memorandum of understanding, so this order represents a further $4.5 billion reduction at list prices from Emirates’ original announcement.

Furthermore, the confirmation of the previously announced larger Dreamliner order has come at the additional expense of 30 777x aircraft that has recently faced delays into production until 2021. Emirates have substituted 30 aircraft from their 777x order to the smaller 787-9 which represents a $3.7 billion order reduction at list prices.

Emirates also did not return my request for comment on their Boeing order and subsequent substitution.

With the A330neo order omission representing a net $5 billion decrease on Emirates’ previously announced A350/A330neo order, at list prices. The smaller variant and overall reduction in the 787 Dreamliner order reducing from 40 to 30 aircraft and also scaling down the variant from the -10 to the -9 represents a $4.5 billion reduction at list prices from Emirates’ previous announcement. Additionally, the reduction of 30 777x aircraft in exchange for the Dreamliner order is a $12.2 billion reduction at list prices.

To summarise, the headlines appear to shout out large aircraft orders from Emirates, however, when we look at the actual details and composition of these previously announced orders, and account for the shuffling around of aircraft variation, the announcements at the Dubai Airshow represent a net reduction of $20 billion of aircraft orders versus previous announcements.