Just months before the Airbus A350 is scheduled to enter service, Dubai’s Emirates Airline cancelled its entire order for 70 of the planes. An Airbus spokesman said that the cancellation “is not good news commercially, but not bad news financially.”
The value of the lost order, at current list prices of $295 million for an A350-900 XWB and $341 million for each A350-1000 XWB, is about $21.6 billion.
The Boeing Co. (NYSE: BA) could be a big winner here. Emirates Air placed an order for 150 of Boeing’s newest plane, the 777X, at last November’s Dubai Air Show. That order, which also includes options on an additional 50 planes, is worth some $76 billion to Boeing at the current list price of $377 million for the 777-9X.
Boeing’s 777 and the 777X compete for the same buyers as the A350 family from Airbus. The 777 is available today, but first deliveries of the 777X are not scheduled until 2020. Emirates Air had been scheduled to receive its first A350 in 2019.
Airbus had taken orders for 812 of the A350s as of the end of May, and Emirates Air’s cancellation will have an impact on the company’s manufacturing schedule. The Dubai airline had ordered 50 of the A350-900s and 20 of the A350-1000s.
According to a report at Reuters, Airbus said the cancellation was the result of a “fleet requirement review” at Emirates Air, and that the airline is shifting toward the larger A380. Emirates Air has ordered a total of 140 of the A380 aircraft and taken delivery of 48 so far. Emirates Air is Airbus’s largest customer for the A380, accounting for more than half the 261 orders for the plane.
What appears to have happened is that Emirates Air has settled on Boeing’s 777 and 777X as its twin-engine wide-body standard and the A380 as the airline’s four-engine wide-body. That is the good news for Boeing in the announcement.