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Boeing signs $27 billion deal with flydubai for 225 737MAX jets

Boeing signs $27 billion deal with flydubai for 225 737MAX jets

2017 11 16

2017 11 16

* Purchase is largest single-aisle jet order by number and total value yet from a Middle East carrier

by Sarah Townsend and Massoud A. Derhally

 

Flydubai will send the Boeing 737MAX aircraft into service as it retires older jets and continues its expansion programme. Natalie Naccache / Bloomberg

Boeing signed another landmark deal at the Dubai Airshow, this time for 225 single-aisle 737MAX jets from flydubai which is worth US$27 billion at list prices before discount.

“Today’s aircraft order underlines the success of flydubai’s founding vision helping to strengthen trade and tourism links across its network and has contributed to the enhanced connectivity of Dubai’s aviation hub," said Sheikh Ahmed bin Saeed Al Maktoum, chairman of flydubai.

"In under a decade, flydubai has extended its network to 97 destinations in 44 countries and we look forward to the arrival of the new aircraft from 2019 in support of our future ambitions.”

The deal is the largest single-aisle jet order by number of aircraft and total value yet from a Middle East carrier.

The purchase includes a firm order for 175 aircraft, with an option for 50 more. The mix comprises 737MAX-8, MAX-9 and 10 models. The carrier will begin take delivery of the new aircraft between 2019 and 2029.

The latest agreement brings the total number of aircraft the airline has on order to 320.

“Since we launched in 2009, flydubai has opened up 67 previously underserved markets," said flydubai chief executive Ghaith Al Ghaith. "We ordered this aircraft model as it has given us the versatility and flexibility to carry 44 million passengers since our first flight.”

The carrier's decision to widen the pool of the 737 Max family of jets makes sense and is a way to "keep costs in check and avoiding complexity by way of introducing a new sub-type into its fleet," said Saj Ahmad, chief analyst at StrategicAero Research.

"This is a huge endorsement for Boeing, particularly the 737-9 and 737-10. This deal allows the airline to forge a path with Emirates and work more extensively. The 737-10s in particular will sit nicely in a fleet fit beneath Emirates' 787-9s."

Flydubai entered into an expanded codeshare agreement with Emirates in July under which the two Dubai carriers are expanding their shared network to reduce route duplication and achieve efficiencies.

"We have managed to improve connectivity between the two airlines from three hours to two hours and have launched over 40 new routes on the codeshare,” Mr Al Ghaith said.

Flydubai intends to open “a handful” of new routes within the next two months, Mr Al Ghaith said, adding that Eastern Europe was a key growth opportunity for the airline.

“Some of these routes will be driven by the relationship with Emirates.”

The deal with flydubai takes the value of Boeing aircraft purchases this week with the budget carrier and with Emirates, both of which are owed by the government of Dubai, to $42.1 billion.

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