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Published on : Tuesday, November 19, 2013
Etihad Airways, the national airline of the United Arab Emirates, today announced its largest ever fleet order, for 199 aircraft and 294 engines, in a US$ 67 billion dollar deal which will enable the airline to accelerate its industry-leading growth over the next decade.
It announced firm orders at the Dubai Air Show for 87 Airbus and 56 Boeing aircraft, with a further 56 options and purchase rights. The new aircraft will be powered by 127 GE Aviation, 115 Rolls-Royce and 52 CFM engines.
The new aircraft will be used to support the ambitious growth strategy of Etihad Airways, launching into new markets and increasing frequencies on existing routes, as well as progressively replacing its older, less efficient aircraft.
In a unique new approach, Etihad Airways will have a capability to redirect orders to members of its equity alliance, the airlines in key markets around the world in which it holds minority shareholdings. This will allow capacity to be allocated where most required, while improving fleet commonality and sharing significant cost synergies among equity alliance carriers.
The order, for 25 next-generation Boeing 777X aircraft, 30 Boeing 787-10 Dreamliners, one Boeing 777 freighter, 50 Airbus A350 XWB, 36 Airbus A320neo family aircraft and one Airbus A330-200F, will see passenger aircraft deliveries start in 2018.
The airline currently has a fleet of 86 aircraft, with more than 80 on firm order. Its last major aircraft deal was made at the Farnborough Air Show in 2008, where Etihad Airways announced firm orders for 100 aircraft, in a long-term order which was at the time one of the largest in commercial aviation history. The value of the 2008 and 2013 orders, including engines, tops US$ 110 billion at list prices.
Etihad Airways will now become the single largest airline customer for the Boeing 787 Dreamliner, with the 30 aircraft in this order being added to 41 announced in previous orders. It will also become a launch customer for the Boeing 777-8X aircraft.
James Hogan, President and Chief Executive Officer of Etihad Airways, said: “Last week, Etihad Airways celebrated its tenth anniversary. In just one decade, we have grown into an airline with 86 aircraft, carrying more than 11 million passengers on 97 routes, served by more than 16,500 employees.
“We now have seven equity alliance partners reaching across the world and a business strategy that has seen us create the world’s leading airline. We have achieved all of this while reaching sustainable profitability.
“These aircraft orders provide the next step in our long-term growth strategy. They are about meeting the needs of the next 10 years, and beyond, as we grow further and faster than ever before.
“We are helping to establish Abu Dhabi as one of the world’s great aviation hubs, offering connections to cities on every continent. This order will provide us with the capacity to continue with those ambitious aspirations.”
The mix of wide- and narrow-body aircraft will help support the development of the airline’s maturing network, focused on its hub at Abu Dhabi International Airport, which will see the new Midfield Terminal opening in 2017, significantly increasing capacity.
Mr Hogan said the ability to share the orders with members of the equity alliance offered a unique opportunity. Etihad Airways currently holds stakes in airberlin, Air Seychelles, Aer Lingus, Virgin Australia, and Air Serbia. Etihad Airways last week received regulatory approval for a proposed 24 per cent investment in India’s Jet Airways.
Today, it also announced the acquisition of a 33.3 per cent stake in Swiss carrier, Darwin Airline, which will offer Etihad Airways’ first branded regional operations under the new Etihad Regional badge and livery.
Mr Hogan said: “The revenue benefits of our equity alliance, to all the members, have always been clear. But the real strength of this strategy lies in the opportunity for business synergies which can improve the operating costs of all the partners. This means all our strategic partners will have the chance to benefit from it.
“When we made our last major order, at Farnborough in 2008, we structured deals that gave us great flexibility in the timing of aircraft deliveries, allowing us to match them to actual passenger demand, according to market dynamics.
“These deals take that concept a step further, allowing us to offer capacity where and when it is most needed within the equity alliance. The opportunity to standardise fleets and align product among members – whilst always keeping the distinct brand identities of each airline – will offer both cost synergies and marketing benefits.”