Canadian Manufacturing

Airbus and Jazeera Airways reach a $3.3B aircraft deal

The purchases have signaled that airline executives see the ravaged industry gradually recovering from the pandemic, with demand for travel set to strongly increase in the coming years.

November 16, 2021  by Associated Press

Airbus won its third deal of the Dubai Air Show on Nov. 16, valued over $3.3 billion to sell 28 new aircraft to Kuwait’s Jazeera Airways.

The European plane maker’s agreement includes 20 single-aisle A320neos and eight A321neos, which competes directly with Boeing’s 737 Max, along with an option to sell another five planes to the low-cost, fast-growing airline.

While the executives described the deal as a memorandum of understanding rather than a firm order, Rohit Ramachandran, CEO of Jazeera Airways, said he considered the handshake “to far exceed any immediate formal collateral” behind the agreement.

“There’s a great level of trust to which honestly one could ascribe a significant dollar value,” said Ramachandran, calling it a “realistic, modest” order. The executives said the first planes should be delivered in 2026.

Advertisement

The Kuwait-based Jazeera Airways, an upstart Middle East discount carrier, launched in 2004 as one of the first non-government owned airlines in the Persian Gulf while demand and competition for low-cost travel intensified in the region.

The frenetic trade show in Dubai typically sees a stream of order and product announcements. But this year’s exhibition, in the shadow of the coronavirus pandemic that triggered the aviation industry’s worst-ever crisis, has been more subdued than in the past.

Still on the first two days, Airbus also made blockbuster sales, selling 111 new aircraft to the Air Lease Corporation and 255 new aircraft to Indigo Partners’ various low cost carriers — a deal valued at some $30 billion, based on the pre-pandemic price list.

The purchases have signaled that airline executives see the ravaged industry gradually recovering from the pandemic, with demand for travel set to strongly increase in the coming years. Not long ago, airlines were asking for government bailouts as the virus closed borders and grounded planes.

The trade show typically pits France-based Airbus and its American rival Boeing, the two manufacturers at the top of the supply chain, against each other in the crucial Mideast market filled with long-haul carriers connecting East and West. Boeing has yet to make a major order announcement at the show.

The meeting comes as Russia promotes its Sukhoi Su-75 Checkmate fighter jet at the air show — its first showing outside Russia. The UAE has tried to acquire the Lockheed Martin F-35 since formally recognizing Israel last year in a deal brokered by the Trump administration, but that major arms deal has slowed under U.S. President Joe Biden.