"DAE cancelled 34 A320s and 11 A350s," says Justin Dubon, a spokesman for Airbus. AFP / Airbus / Handout
"DAE cancelled 34 A320s and 11 A350s," says Justin Dubon, a spokesman for Airbus. AFP / Airbus / Handout

DAE cancels $5bn Airbus order



The aircraft leasing company Dubai Aerospace Enterprise (DAE) has cancelled the last of its orders for jets from Airbus, taking the total value of rescinded orders to more than US$10.5 billion (Dh38.56bn).

In the latest sign of trouble at DAE, the company cancelled orders for 45 jets worth some $5.82bn, according to monthly order figures released by Airbus.

"DAE cancelled 34 A320s and 11 A350s," Justin Dubon, a spokesman for Airbus, told The National.

The list price for the A350-900, which carries 314 passengers, is $267 million, while the smaller A320 costs $85m.

Mr Dubon said DAE had "no more orders outstanding" with Airbus.

The move follows last month's departure of Robert Genise as chief executive of DAE.

Mr Genise left the company ahead of a deadline this month to repay bank loans of more than $700m.

DAE ordered more than 200 aircraft in 2007, but after the financial crisis set in, the company cancelled several multibillion-dollar deals.

In March, the company cancelled Airbus orders worth $4.7bn, weeks after cancelling an order for 32 Boeing aircraft worth $2bn.

"DAE have cancelled their orders from both carriers, not just Airbus," said Mr Dubon.

A spokeswoman for DAE, which is majority owned by the Government, declined to comment when contacted by The National.

According to Boeing, DAE has an outstanding order for 61 aircraft, although the plane maker is shortly due to update its order statistics.

Saj Ahmad, an analyst at FBE Aerospace in London, said the company has now cancelled about half of the 200 aircraft it ordered in 2007, Mr Ahmad said.

Mr Dubon declined to specify the financial implications of DAE cancelling the order.

But the company might have lost the down payments it made on the orders, Mr Ahmad said.

"They would have put down some nominal sum to secure production slots. It probably wouldn't have been more than a few million dollars cumulatively," he said.

DAE has until July 23 to repay bank loans of more than $700m.

Mr Ahmad said that while he believed that DAE ould still pay off the loans, an extension of the facilities was a possibility.

DAE's shareholders include DIFC Investments and Investment Corporation of Dubai, Dubai's sovereign wealth arm.

Among the carriers leasing aircraft from DAE are Virgin Blue, Emirates Airline, Easyjet and Kingfisher Airlines.

DAE's total publicly disclosed debt is about $2.7bn, according to Bloomberg News figures. A $500m term loan and a $225m revolving credit facility come due on July 23, the figures show.

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