Emirates delays 777 deliveries

Holding off on aircraft will protect the company's cash reserves during the downturn, officials say.

Emirates will hold off on receiving new Boeing 777 aircraft, to protect its cash reserves through the downturn.

Emirates Airline will delay the delivery of several new Boeing 777 aircraft next year by several months to protect its cash reserves during the downturn, say officials. It is the latest interim measure for the Dubai airline to navigate through the global recession, following efforts to give staff leave of absence and reposition aircraft to more promising routes as demand has waned in some markets. Emirates is expected to announce a small profit in the coming weeks amid one of the worst revenue environments for airlines in decades. Maurice Flanagan, the executive vice chairman of Emirates Airline and Group, said there had been a "slight rearrangement" of deliveries next year, without disclosing further details. However, in a media report yesterday, Abdullah al Shams, a fleet manager at Emirates based at the Boeing factory in Washington, said the delays involved the long-range 777. Airlines around the world have deferred and even cancelled aircraft orders amid the global recession. Boeing has received 40 new aircraft orders this year while seeing 33 previous orders cancelled. The cancellations come as airlines in the first quarter lost US$1 billion (Dh3.67bn) - in line with an earlier forecast for a $4.7bn loss for the year, the International Air Transport Association said. "Around the globe, we are seeing a number of customers look for some deferrals, including in the Middle East," said Marty Bentrott, the senior vice president of Middle East and Africa sales for Boeing's commercial aeroplanes division. "We are staying close to these customers in these challenging times." Mr Flanagan said the move would help the airline's cash position, which suffered a 32 per cent drop during the six months ending in September, to Dh8.4bn from Dh12.6bn. The airline said the drop came after pre-delivery payments, financing a cabin refurbishment programme and paying a dividend to the Dubai Government, its primary shareholder. "Re-arranging these orders means that forecast pre-delivery payments will not take place," he said. "The cash position is strengthened, and the market will come back in a year from now." Deferring the deliveries would give it more time to arrange financing for the aeroplanes, he added. The long-range 777, capable of flying nearly 20 hours non-stop, is a major feature in Emirates's plans to expand its network to six continents. The aircraft costs between $205 million and $286m each, at list prices. Emirates will receive a total of 17 new aircraft this year, including wide-bodied planes from Airbus, and is expected to receive a similar number next year.