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WRAPUP-Airbus dominates second day of Dubai show as Boeing wins MAX order

Mon, 18th Nov 2019 16:45

* Emirates orders 50 Airbus A350 long-haul jets

* Air Arabia orders 120 Airbus medium-haul jets

* Boeing wins first official MAX order since grounding

* Deals leave doubts over A330 production - analysts

By Stanley Carvalho and Alexander Cornwell

DUBAI, Nov 18 (Reuters) - Gulf airlines Emirates and Air
Arabia spent a combined $30 billion at list prices on Airbus
jetliners as the Dubai Airshow burst into life on
Monday, while Boeing won a symbolic first official order
for the 737 MAX since its grounding in March.

Emirates threw its weight behind the Airbus A350 with an
expanded order for 50 jets worth $16 billion, but shelved plans
to order the slightly smaller A330neo as the Middle East’s
largest carrier embarked on a more diversified fleet structure.

The firm order, signed in front of reporters on day two of
the Nov 17-21 show, drew a line under the A380 superjumbo, the
world's largest airliner which Airbus had decided earlier this
year to close, prompting Emirates to order mid-sized planes.

Under its original plans tentatively announced in February,
Emirates would have ordered 40 upgraded A330neos and 30 slightly
larger A350-900s. It decided instead to opt for 50 of the
lightweight A350s, citing in part the impact on lower emissions.

"Together with the A380, the A350 will give us more capacity
and flexibility. We will be able to expand to new markets with
these aircraft," Emirates Chairman and Chief Executive Officer
Sheikh Ahmed bin Saeed Al-Maktoum said.

Analysts said the deal cemented the position of the A350 at
Emirates after it cancelled a previous order for A350s in 2014.

But it also raised questions over production rates for the
once highly profitable A330 family, which has been aiming for a
new lease life after switching to new Rolls-Royce engines.

Shares in Airbus fell 1.1%, lagging a slightly weaker
European market.

Airbus builds 50 A330s a year or 4.2 a month. That figure
could slip closer to 3 a month from 2022, one analyst said.

NO 'A350NEO'

The A350 gives Emirates greater room for growth than the
A330neo though the airline has not definitively shut the door on
the jet, an update to A330 models it has operated before.

Airbus Chief Executive Guillaume Faury denied reports that
Airbus is also looking at a future engine upgrade of the A350,
something experts warn might dampen current demand for the jet.

But Monday's business left unanswered questions over the
fate of 40 competing Boeing 787 jets also provisionally ordered
by Emirates.

Sheikh Ahmed said Emirates remained in talks with Boeing on
firming up the order. But industry sources said that could come
at a cost to Boeing since Emirates would in exchange reduce an
order for 150 Boeing 777X after deliveries were pushed back by a
year, which the airline complains is holding back its growth.

Reflecting growth among budget carriers, Sharjah-based Air
Arabia ordered 120 Airbus A320neo and A321neo jets in a deal
worth around $14 billion, the biggest in terms of units so far
at the Middle East's largest aerospace event.

Airbus and Boeing are pushing for order endorsements from
customers that have been frustrated with plane and engine makers
over delays in deliveries and engine issues.

Airbus last month cut its full-year delivery goal for
commercial jets due to production glitches. Faury told reporters
on Monday A321neo deliveries should return to normal in 2021.

Boeing is trying to turn the corner over the grounding of
its top-selling 737 MAX after two fatal crashes in Ethiopia and
Indonesia that killed 346 people within a span of five months.

Turkey's SunExpress announced a $1.2 billion deal
for 10 more 737 MAX 8 aircraft, on top of 32 already ordered.

It was the first firm MAX order since it was grounded in
March and confirmed a Reuters report that a deal was close.

British Airways-owner IAG signed a surprise letter of intent
in June to order 200 MAX, dropping its medium-haul supplier
Airbus, but the deal has not yet been finalised.
(Additional repoirting by Ankit Ajmera, Writing by Ghaida
Ghantous, Tim Hepher. Editing by Jane Merriman)

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