Dubai Airshow sees a host of deal-making with budget airlines making waves
Dubai — Airbus’s patience paid off on Wednesday, with an order for a record 430 of its A320neo-family jets, while Budget airline flydubai committed to buying 175 Boeing 737 Max jets.
Airbus landed the deal as US investor Bill Franke raised his bet on budget airlines. The preliminary deal, worth up to $50bn, is designed to supply four airlines in which Franke’s Indigo Partners has stakes: Frontier Airlines, Mexico’s Volaris, Chilean carrier JetSmart and Hungary’s Wizz Air.
Franke signed the agreement at the Dubai Airshow amid a flurry of deal-making, as airlines take advantage of a recent slowdown in demand for new aircraft to negotiate competitive prices from leading manufacturers. Airbus said it expected to finalise its agreement with Franke in the coming weeks.
Flydubai’s Boeing dea is worth about $21bn at list prices.
The two deals again underscore how budget carriers are rewriting the rule book by combining bargain fares augmented by optional services and upgrades for which passengers pay additional fees.
The Franke deal also marks a dramatic swan-song for Airbus sales chief John Leahy, who is due to retire in the coming months after holding the job since 1994.
The prospect of a deal to keep Airbus’s A380 super-jumbo in production beyond the end of the decade remained unsure, with main customer Emirates seeking guarantees on keeping production lines open. "I think both sides will take stock and see if something can be agreed later this year," an industry source told Reuters.
This week, the Dubai-based airline committed to buying 40 of Boeing’s 787 Dreamliner.
Emirates and flydubai are both owned by the government of Dubai, which has pushed the two airlines to work more closely. The flydubai and Emirates deals were reportedly negotiated separately.