DUBAI (Reuters) – Dubai Aerospace Enterprise favours expanding its fleet via a takeover of a rival after the group was unable to agree on a major order from Airbus and Boeing , its chief executive said.
DAE, which joined the top tier of aircraft lessors with the 2017 acquisition of Dublin-based AWAS, was interested in a near-record purchase of 400 jets from Airbus and Boeing.
DAE - Way - Price - Terms - Conditions
“It is hard to see how DAE is able to find a way to accept the price and terms and conditions the OEMs (original equipment manufacturer) are offering,” CEO Firoz Tarapore told Reuters.
A pricing disagreement had been an issue when Tarapore told Reuters in May 2018 DAE was interested in the order. This has led to DAE pursuing other options to increase its portfolio.
Airbus - Boeing - Comment
Airbus and Boeing could not be immediately reached for comment.
The order for 400 single-aisle aircraft would have been worth more than $40 billion at list prices, though discounts of at least 50 percent are common on large orders.
Wait - Concern - Dubai - State - Fund
The long wait is not a concern for the Dubai state fund company which wants to double its portfolio to 800 jets within the next six to eight years.
But Tarapore said the difference between the order price and the rental available in the leasing market was “so large that it doesn’t make any sense to have any hope that the gap narrows in the near future.”
Years - Incentive - Unit - Year - Price
“If you are sold out for four years what is your incentive to sell the first unit of the fifth year at any price other than the absolute highest price you can charge for it?” Tarapore said.
DAE could revisit a direct order in two years time as manufacturers clear their backlog of deliveries,...
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