At DAE as side Airbus it made no comment

After the bursting of the housing bubble that has shaken Dubai early this year, the shock of the financial crisis wave requires the Emirate to revise downward its ambitions in air transport and aeronautics. According to our information, the Emirate would in particular decided to refocus its investments on the Emirates company and the future international airport over the activities of hire purchase of aircraft from Dubai Aerospace Enterprise (DAE). This company also began to renegotiate its giant orders of Airbus and Boeing.

With not less than 100 units in command at Airbus as in Boeing, DAE is one of the largest customers of the two aircraft manufacturers. And its main shareholder is the Chairman and main shareholder of Emirates, sheikh Ahmed bin Saeed Al Maktoum. This one who made the event, three weeks ago in Berlin, by signing a record order of 32 Airbus A380. This spectacular, fallen to contract to revive the career of the A380, would participate in terms of the ongoing negotiations to transform part of DAE orders additional aircraft for Emirates.

Launched in 2006, with aims to become one of the world leaders in the hire of aircraft, aircraft maintenance and airport management, DAE had news at the Dubai show of 2007 in turning command of 228 aircraft, Boeing 118 and 100 Airbus, for a total of $ 28.7 billion. The holding company had also purchased several companies maintenance and was even interested in London-Gatwick airport.

But the financial crisis obliged him to sleep several of his projects, such as DAE University Aeronautical University, pilot training centre and the airport subsidiary DAE Airport. And since several weeks, subsidiary of leasing DAE Capital have pushed all aircraft deliveries and ceased to pay the instalments, says a close source from the folder. On the 118 aircraft ordered in 2007 to Boeing, DAE has for the time taken delivery of 4 Boeing and none of the 100 Airbus ordered (70 A320 medium-haul and 30 A350-900). The A350 is not expected before 2014. However, deliveries of A320 should already begin. BOD Genise, American CEO of DAE, is also on departure, after having to announce end of 2009, that the goal of 1 billion of turnover planned for 2010, could not be reached before end of 2013, beginning 2014. At DAE as side Airbus, it made no comment. Single precision made by Airbus: DAE commands are always to the book.

Rationalize investment

DAE thus appears to be the general problem of debt of Dubai. If the Emirate has managed to resolve the main black point, namely the refinancing of the real estate holding company Dubai World, there still remain 5 billion in loans maturing by end July, of which 1.5 billion for single DAE and 1.25 billion for one of its major shareholders, Dubai International Capital Investment Fund. And the next year, Dubai should still pay $ 22 billion of loans, including 1 billion for DAE, and even 10 billion in 2012.

Hence the need to streamline as much as possible the investments, even if a review of DAE repository, controlled by the sovereign wealth Fund of Dubai and one of the richest men in the world, seems unlikely.

But, rather than to cancel purely and commands, which would resolve neither manufacturers nor Ahmed Al Maktoum, simply theoretically forced to pay penalties, the solution would be to discreetly see part of the deliveries and transform another part in new contracts for Emirates. Unlike DAE Capital, which remains virtually non-existent in the highly competitive market of the hire, the Dubai company has credit and growth necessary to make good use.

After 32 A380, Emirates should announce at Farnborough the next aviation show, in July, a big order for Boeing 777, always in the same spirit. What to allow Dubai leaders to show their confidence in the future and the manufacturer's us reassure the markets.