Emirates has signed a deal with Boeing this past week for 50 more 777-300ER aircraft with a list value of $18 Billion.   It’s a big deal for Boeing and a big one for Emirates although Emirates is rather used to making big deals. 

Emirates already has the largest fleet of 777 aircraft and they like and use the -300ER very effectively on their routes.  They also have 50 A350-900 and 20 A350-1000 on order.  And let’s not forget the the massive number of A380s still to be delivered. 

That’s a lot of capacity.  Consider that Emirates uses the -300ER in capacities ranging from 354 seats to 442 seats.  I suspect that some of these -300ERs will replace -200LRs which will then be used to replace A340-500s that are not nearly as economical as the -200LRs.  In addition, I think even more of the -300ERs will replace some aging -300/-200 standards currently used for high density flights to cities in medium haul range of Dubai.  That will also reduce the number of Rolls Royce Trent powered 777s in their fleet and convert the focus more fully to GE90 engined 777s.  That said, there will still be quite a few -300ERs coming online as additional capacity. 

Can they fill those aircraft?  Regionally, Emirates serves cities that are mega-dense with populations and make money doing so by cramming as many people into coach as possible.  Globally, Emirates is expanding to new cities in ways that does make one wonder if there is much low hanging fruit left for them.  Take for instance their new flights to cities such as Seattle, Dallas, Buenos Aires, Dublin, Harare, Lusaka and Rio de Janeiro.  Not a one of those cities is a mega dense destination such as those flights they’ve had to cities already served. 

I continue to question the viability of Emirates in light of the evolving landscape for point to point routes around the world made possible by the latest generation aircraft coming online.

This order also gives Emirates a whip to use on Boeing.  Boeing is now talking about what the next generation 777 should look like.  It is a given that we’ll see a new wing and likely new or improved engines as well.   Increased use of composites is also probably a given.  Some think the -200LR gets stretched a bit with the goal of similar range and the -300ER gets stretched more with a goal of more payload over existing range. 

Neither of those configurations necessarily makes Emirates thrilled.  Emirates model is based on high capacity, long range flights and they’ll want to see more range with similar payloads in lieu of more capacity with similar range.  To an extent, neither option is mutually exclusive.  Airlines such as Emirates can configure aircraft for less than high density capacity and get more range.  But only to a point.

This order gives Emirates and its CEO Tim Clark the opportunity to start bludgeoning Boeing into building a high capacity, ultra-long range aircraft that they need and want.  Its become clear that the A350-1000XWB is not going to be that aircraft.  Not the way Emirates wants them.  Emirates will threaten order cancellation if it doesn’t get its way with a definition of those next generation 777s that meets its needs.

Will Boeing crumble?  I think not.  Boeing has rightfully valued Emirates as a customer but also recognizes that meeting the missions of other airlines is more important than just one airline.   It doesn’t like all its eggs in one basket and building an Emirates 777 will result in other airlines being less than enthusiastic for the aircraft.   However, I do think that Emirates can nudge Boeing into more performance overall and that would be good for everyone involved.

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