Boeing 777X delays may affect Dubai-based Emirates’ fleet plans: president

An employee signs a poster before a ceremony that signaled the beginning of production of the first Boeing 777X aircraft at the company’s factory in Everett, Washington in this October 23, 2017 file photo. (AFP)
Updated 18 October 2019

Boeing 777X delays may affect Dubai-based Emirates’ fleet plans: president

  • Emirates has 150 of the 350-400-seat model on order, of which eight were originally slated for delivery next year
  • Boeing suspended load testing on its new 777X in September, when media reports said a cargo door failed a ground test

LONDON: Delivery delays to Boeing’s 777X jetliner are holding back Emirates’ growth and could partially affect the Gulf carrier’s broader fleet requirements, airline President Tim Clark said on Thursday.
Dubai-based Emirates has 150 of the 350-400-seat model on order, of which eight were originally slated for delivery next year, and has yet to firm up orders for 40 of Boeing’s mid-size 787 jets.
The world’s largest operator of long-haul aircraft is also in talks to complete an order for 70 Airbus jets, with both sets of negotiations in focus ahead of the Dubai Airshow in November.
Boeing suspended load testing on its new 777X in September, when media reports said a cargo door failed a ground test. There have also been issues with its General Electric GE9X engine, the largest ever produced for an airliner.
The plane was originally due to enter service with Emirates in June 2020. In an interview, Clark said Emirates no longer expects to receive the first 777X before “April or the second quarter” of 2021.
“That has conditioned everything else,” he told Reuters on the sidelines of the Airlines 2050 conference in London.
“First of all, I want to know when the thing’s going to come,” he said. “Our fleet plans are very much driven by when these aircraft are going to be delivered to us.”
The airline’s capacity growth is being held back by the delivery delays and will resume only “when I get some visibility on all this,” Clark said.
A Boeing spokesman said the US manufacturer was working through its “disciplined development process” to prepare the 777-9 for its first flight and delivery to launch customers.
In September, Boeing Chief Executive Dennis Muilenburg said it was “working toward entry into service (of the 777X) by the end of 2020,” subject to the availability of engines.
There has been speculation that Emirates could defer or reduce 777X orders, or else downgrade some to the smaller 787.
Clark told the Seattle Times in June that Emirates was discussing a combination of 777Xs and 787s that may preserve overall numbers but substitute some jets and defer others.
Planemakers already face pressure over late deliveries of smaller aircraft, with Boeing’s 737 MAX grounded following two accidents and Airbus’s A320neo hit by industrial delays. But the November air show is expected to test airlines’ leverage in negotiations for some of the industry’s biggest jets.
While Boeing tries to finalize its 787 deal, Airbus will be hoping to complete an order for 40 similar-sized A330neo and 30 A350 jets which Emirates tentatively ordered in February when Airbus decided to halt production of its flagship A380.
Asked about the status of new Airbus orders, Clark stressed the importance of keeping costly assets working reliably.
“You’ve probably heard me say in the industry, I want aircraft that will give me 99.9 percent dispatch reliability from day one. Until they can contract for that, we’re not going to take them.”
An Airbus spokeswoman said the A330 family has a dispatch reliability — or the proportion of departures without technical problems — of 99.4 percent, with the A350 already at 99.9 percent.
Clark said the aerospace industry had “over-promised” in recent years, placing jets in the market before they had the technical maturity to deal reliably with hot Gulf conditions.
“The engines in particular have got to be able to do that, and I’m not quite sure they are there yet.”
He also said Emirates would begin flying to Mexico City as planned on Dec. 9, despite a successful challenge by Delta Air Lines’ partner Aeromexico against a bilateral government pact underpinning the new route.
“This is Aeromexico and Delta making life difficult for us,” Clark said. “There will be a legal wrangling going on, but as far as I’m concerned, we’re going to fly.”
Delta referred queries to Aeromexico which had no immediate comment.


Bank jobs go as HSBC and Emirates NBD reduce costs

Updated 15 November 2019

Bank jobs go as HSBC and Emirates NBD reduce costs

  • Others have also reduced headcount amid economic downturn and property market weakness

DUBAI: HSBC Holdings has laid off about 40 bankers in the UAE and Emirates NBD is cutting around 100 jobs, as banks in the Arab world’s second-biggest economy reduce costs.

The cuts come amid weak economic growth, especially in Dubai, which is suffering from a property downturn.

HSBC’s redundancies came after the London-based bank reported a sharp fall in earnings and warned of a costly restructuring, as interim CEO Noel Quinn seeks to tackle its problems head-on.

HSBC has about 3,000 staff in the UAE, part of a nearly 10,000-strong workforce in the Middle East, North Africa and Turkey.

The cuts at Dubai’s largest lender Emirates NBD came in consumer sales and liabilities, one source said, while a second played down the significance of the move.

HSBC and Emirates NBD declined to comment.

“The cuts are part of cost cutting and rationalizing to drive efficiencies in a challenging market,” the second source said.

Other banks have also reduced staff this year. UAE central bank data shows local banks laid off 446 people in the 12 months until the end of September. Foreign banks added staff in the same period.

Staff at local banks account for over 80 percent of the 35,518 banking employees in the country.

The merger between Abu Dhabi Commercial Bank, Union Commercial Bank and Al Hilal Bank saw hundreds of redundancies.

Commercial Bank International (CBI) said it would offer voluntary retirement to employees in September, which sources said saw over 100 departures. Standard Chartered, too, cut over 100 jobs in the UAE in September.

Rating agency Fitch warned in September a weakening property market would put more pressure on the UAE’s banking sector.