Massive orders close out the 2017 Dubai Air Show

It was a nice quiet air show in Dubai this year. Sure, a few orders were signed but nothing massive happened and that seemed to be pretty much okay with everyone. Then day 4 rolled around. Rather than limp quietly into the final hours the 2017 Dubai Air Show closed out with a bang. In the span of a couple hours more than 650 aircraft were ordered representing nearly $70 billion at list prices (though typically airlines pay significantly less. Still the one-two punch of announcements back-to-back makes this year’s show the place to be for aircraft order news. It also raises some interesting points about where commercial aviation is headed.

Airbus scores 430 plane deal

Airbus made the first splash with a 430 aircraft order (MoU, really, but they’ll get to the final papers eventually) from Indigo Partners. “But that’s not an airline,” you say? Sure, but the investment company holds stakes in four airlines: Frontier, JetSMART, Wizz Air and Volaris. The 430 planes will be split among these airlines to support growth in LCC markets around the world.

Very interesting deal, and not just for the $ terms. Bill Plante is applying a Costco model of sorts: buying in bulk for portfolio investments like Wizz, Frontier, Volaris, JetSmart. #scoop #DAS17 https://t.co/PcecmIXViK

— Julie Johnsson (@juliejohnsson) November 15, 2017

The Airbus deliveries are split between A320neo and A321neo and doubles the previous A320 family orders for the Indigo Partners family of airlines.

Where do 430 new planes go?
WizzAir-146
Frontier-134
jetSMART-70
Volaris-80
Of the total 274 will be A320neo and 155 A321neo. #avgeek #das17 pic.twitter.com/UojxwzF4cy

— Seth Miller (@WandrMe) November 15, 2017

While some older aircraft in those airlines may be retired as the new deliveries happen the bulk will deliver growth in capacity. Wizz Air is poised to be the 3rd largest operator in Europe based on these numbers while Frontier will more than triple (yes, really, 3x!) its fleet. The carrier currently flies 70 A320 family aircraft and now has ~200 on order. Indigo Partners also recently shelved plans to take Frontier public via IPO, adding to the complexity of understanding the carrier’s future.

After massive Indigo Airbus order at #DAS17, US-based Frontier Airlines is poised to triple their fleet. 70+ planes currently; nearly 200 A320/321neos on order.

— Tim Jue (@timjue) November 15, 2017

The Indigo family orders will be delivered between 2021-2026 according to the companies. Airbus says it will not need to adjust its assembly rate to accommodate the new order.

Boeing’s 225 MAX

Not willing to let Airbus hog the spotlight completely, Boeing showed up within the hour holding a 225 aircraft order (MoU, see above) from flydubai. The Dubai-based carrier placed the largest ever single-aisle aircraft order from a Middle East-based airline, with 175 firm 737MAX aircraft and 50 options on the books.

Well, @flydubai, your spectacular #737MAX made jaws drop this week at the Dubai Airshow. How about 225 more? #DAS17 https://t.co/4THrJEc6WJ pic.twitter.com/toOsNIPyGh

— Boeing Airplanes (@BoeingAirplanes) November 15, 2017

The order is particularly interesting given the new premium cabin product flydubai introduced during the show (very similar to JetBlue Mint, but on the 737 rather than the A320 and fewer rows). The airline is owned by the UAE government, just like Emirates is. The two airlines have been inching closer to each other in recent months with Emirates CEO Sir Tim Clark noting that a blend of service types will ultimately be useful.

Therein lies an opportunity. We can merge the seemingly different business model. We can converge our low cost-ish product with theirs. We can supply low cost and full service on the same airplanes. That’s pretty smart, if we can make it work.