Emirates Reportedly Defers Airbus A350 Deal, Citing Engine Durability Concerns Amid Boeing Triumph
Portfolio Pulse from Nabaparna Bhattacharya
Emirates has deferred a deal to purchase Airbus A350-1000 jets, citing concerns over the durability of Rolls Royce engines. Emirates President Tim Clark stated the engines' maintenance interval does not meet their operational standards. Despite this, Emirates is open to ordering 35-50 jets if Rolls-Royce addresses these issues. Meanwhile, Airbus secured an order for ten A350-900 aircraft from EGYPTAIR at the Dubai Airshow. Airbus and Rolls-Royce expressed confidence in the engine's performance. Airbus (EADSY) shares closed up by 0.85%, while Boeing (BA) shares traded higher by 0.49% in premarket.
November 14, 2023 | 1:14 pm
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NEGATIVE IMPACT
Rolls Royce faces criticism from Emirates over the durability of its engines for the Airbus A350-1000, but remains open to supporting Emirates' future fleet growth.
The concerns raised by Emirates regarding the durability of Rolls Royce engines could negatively impact investor sentiment in the short term. However, the willingness to work with Emirates on future fleet plans may mitigate some of the negative impact.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 80
NEUTRAL IMPACT
Airbus faces a potential delay in a significant order from Emirates due to engine durability concerns, but secured an order from EGYPTAIR for ten A350-900 aircraft.
The deferral of the Emirates deal could be seen as a short-term negative due to concerns over engine durability. However, the confirmed order from EGYPTAIR may offset some of the negative sentiment. The stock's slight uptick suggests a neutral to mildly positive short-term impact.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Boeing benefits from Emirates' $50 billion order for 777X jets, contrasting with Emirates' deferral of the Airbus A350 deal.
Boeing's recent $50 billion order from Emirates for 777X jets is a significant positive, especially in light of Emirates' deferral of the Airbus A350 deal due to engine concerns. This contrast may lead to a short-term positive impact on Boeing's stock.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70