Emirates Airlines has backed out of a deal it signed seven years ago to buy 70 Airbus A350s, a major blow to the European plane-maker that could prove a windfall for Chicago-based Boeing.
The canceled order for 50 A350-900s and 20 of the larger A350-1000s, to be delivered in 2019, had been worth $16 billion at the time the deal was inked in 2007.
Emirates didn't elaborate on the reason for the cancellation, other than to say the contract had "lapsed." However, the Dubai-based airline has expressed dismay in the past over A350 development and production delays. The about-face also hurts U.K.-based Rolls-Royce, which was to have supplied the aircraft engines.
"The news comes just months before the new jet, the A350-XWB, is due to enter service, prompting some analysts to wonder whether the decision by Emirates could presage a slowdown in aircraft orders from Persian Gulf carriers.
"Those airlines have been among the most voracious buyers in recent years of wide-body planes from both Airbus and Boeing."
"The A350 is Europe's first jetliner built mainly from advanced new materials and was designed to compete with two types of aircraft from Boeing the lightweight mid-sized 787 Dreamliner and the larger but older 777 mini-jumbo.
"Emirates was among the first buyers for the A350 when it placed the order for 50 A350-900s and 20 A350-1000s in 2007."
Bloomberg says that Boeing's new 777X wide-body could be the "big winner" from the Airbus order cancellation: "Emirates is already the world's biggest customer for the 777 and the biggest for the 777X as well, with 150 orders for the newer plane. Today's announcement suggests that still more Emirates orders for the 777X will follow."