Dubai Aerospace Enterprise (DAE) is negotiating to restructure more than 200 aircraft orders worth US$27 billion (Dh99.16bn) with Airbus and Boeing, a senior Dubai finance official says. The state-backed company made headlines at the 2007 Dubai Airshow when it announced the huge orders with the two aircraft makers and plans to build up a global presence in aircraft leasing. But several media reports, citing unidentified sources, said the firm had since stopped making payments, was not taking delivery of the planes and was seeking to get out of its contractual obligations by shifting them to Dubai's two state-owned carriers Emirates Airline and flydubai.
Abdulrahman al Saleh, the director general of the Dubai Department of Finance, responded to the reports yesterday by saying: "We are in negotiations." Airbus and Boeing declined to comment, while Emirates released a short statement: "Emirates's aircraft orders are based purely on our future strategic requirements. And we do not comment on rumours." DAE joins other regional outfits that made aircraft orders in the boom years but were later forced to delay or cancel orders for new aircraft because of the global credit crisis.
RAK Airways, based in Ras al Khaimah, has said it was negotiating with Boeing over an order for short-haul 737s. And LCAL, a leasing firm based in Dubai, last year cancelled 16 of its 21 orders for the Boeing 787 Dreamliner, citing the plane's production delays and the depressed market for leased aircraft. Emirates may have already stepped in on DAE's behalf, according to Air Finance Journal, which reported the long-haul airline's $11.5bn order last month for 32 more Airbus A380s was part of the restructuring.
When it was created in 2006, DAE was established as a $15bn company with plans to become a global player in aerospace ranging from airports, aircraft leasing, manufacturing and engineering, and services. DAE's shareholders include the Investment Corporation of Dubai, Dubai International Capital, DIFC Investments, Emaar, Istithmar World and Dubai Silicon Oasis. Its holdings include StandardAero, a US-based maintenance and engineering firm. It was part of a consortium of Dubai and Abu Dhabi companies that bought SR Technics, a Swiss maintenance firm, in 2006.
Last year it sold its stake to Mubadala Development, an investment company owned by the Abu Dhabi Government, which assumed full control of the maintenance firm. :igale@thenational.ae