November 15, 2017 / 7:52 AM / 2 years ago

Boeing in 175 plane deal with budget carrier flydubai

DUBAI (Reuters) - Boeing Co. reached a preliminary deal for 175 of its 737 MAX jets with flydubai on Wednesday, potentially committing the budget airline’s fleet to the U.S. planemaker for another decade.

Emirates Chairman Sheikh Ahmed bin Saeed al-Maktoum and Boeing Commercial Airplanes President & Chief Executive Kevin McAllister attend a news conference at the Dubai Airshow in Dubai, UAE November 15, 2017. REUTERS/Satish Kumar

The Dubai-based carrier wants more than 50 of Boeing’s largest narrowbody jet, the 737-10, as well as to-be-determined numbers of its 737-9s and 737-8s, Boeing said in a statement at the Dubai Airshow.

Reuters had reported that Boeing was close to reaching a deal with flydubai for 175 737 MAX jets.

Flydubai Chairman Sheikh Ahmed bin Saeed al-Maktoum told a news conference the provisional deal was struck Tuesday night.

It is flydubai’s third aircraft deal. It agreed to buy 75 737-8 MAX aircraft at the Dubai Airshow four years ago.

“We try to grow as fast as we want,” Chief Executive Ghaith al-Ghaith told reporters.

Delivery of flydubai’s 175 planes will begin in 2019 and be spread across 10 years with some overlap with the delivery of its 2013 order, al-Ghaith said.

The current fleet of flydubai, which started flights in 2009, is all Boeing. It currently only operates 737-8s.

The provisional deal is worth $27 billion (£20.5 billion), including purchasing options for an additional 50 planes.

Al-Ghaith told Reuters the airline was interested in the new mid-sized jet that Boeing is studying whether to develop, but that it had not been discussed during the 737 negotiations.

Boeing is looking at potentially filling a market gap between narrow and widebody jets with a new aircraft that could seat 220 to 270 passengers.

Boeing Commercial Airplanes Chief Executive Kevin McAllister told the news conference that flydubai’s 737 commitment would be good for jobs in the United States and in the Middle East.

Gulf customers are keen to stress the importance of their orders for U.S. jobs as they are locked in a trade dispute with three major American carriers.

Sheikh Ahmed said the airline had picked the 737s after also looking at Airbus’ similar-sized A320s, echoing comments he made this week in his role as Emirates [EMIRA.UL] chairman when he said the 787 had been chosen over the Airbus A350.

Dubai-based Emirates this week committed to buying 40 of Boeing’s 787 Dreamliner.

Slideshow (3 Images)

Emirates and flydubai are both owned by the government of Dubai, which has pushed the two airlines to work more closely.

McAllister said the flydubai and Emirates deals were negotiated separately.

Also on Wednesday, Airbus reached a preliminary deal for a record 430 of its A320neo-family jets from U.S. investor Bill Franke’s Indigo Partners.

Editing by Jason Neely and Mark Potter

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