Emirates challenges rivals, aims for 120 A380s

Dubai's Emirates launched a double challenge to European airlines yesterday, setting out ambitions to own a fleet of more than 100 Airbus A380 superjumbos and stepping up a war of words over rivals' subsidy claims.

Emirates, which surprised the aviation world by lifting its orders of the world's largest airliner by a third to 90 aircraft in June, is only constrained by a shortage of space to park them, airline president Tim Clark said.

"We would like some more but we are going to run short of space," Clark said in an interview in his glass-walled office overlooking rows of jets at the Middle East's busiest airport.

"120 was the baseline figure that the planners worked to get where we needed to be, but we couldn't order that amount because it was too many for here, so 90 was a compromise."

The carrier will order more when it gets additional space at its home base in Dubai, he added, without giving a date.

Emirates, one of Dubai's most prized assets, has continued to grow exponentially despite a debt crisis that hit the Gulf Arab emirate and several of its government-related entities, leading to the restructuring of billions of dollars in debt.

Passengers of Emirates are growing at 20 per cent annually, said Clark, who expects to maintain this level for the next five years.

The A380 target implies a future Emirates order for 30 of the world's largest airliner, worth $US10 billion ($A10.14 billion) at list prices.

If the airline went ahead with this it would have an A380 fleet worth over $US40 billion and extend its dominance as the European planemaker's largest customer, a move which analysts say would also strengthen the region's growing clout in Europe.

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Clark said Emirates would fulfill all 90 orders of the 525-seat double-decker aircraft which it has placed so far.

In a potentially significant move in the lucrative market for large mid-sized jets, Clark said Emirates was also working with Boeing on the next generation of 777 mini-jumbos.

Emirates ordered 30 777-300ER wide-body 365-seaters in July in a deal potentially worth over $US9 billion.

"We are working with Boeing on the next generation of 777. We are still very interested in a replacement," he said.

Boeing has said it is looking at the future of the aircraft which faces competition from the future Airbus A350-1000.

Clark's comments seemed among the most concrete indications yet of the extent to which Boeing is advancing in proposals to overhaul the 1990s design. Boeing was not available for comment.

A new plane would likely use some carbon-composite technology pioneered for Boeing's 787 Dreamliner, which has been marred by delays, but Clark's views on the jet were more mixed.

"I am very glad we are not buying it and glad we weren't the launch customer," he said. "I think once they sort out the airplane, which they will do, it will be a good machine."

EUROPEAN VS GULF CARRIERS

The rapid expansion of Emirates -- as well as Etihad in Abu Dhabi and Qatar Airways -- has provoked tensions with older airlines and mutual accusations of protectionism. Many carriers fear Gulf-based superjumbos will draw traffic from their hubs.

US and European airlines last week launched a campaign to change rules which allow foreign airlines but not themselves to receive export credits for Airbus and Boeing planes.

Clark said it was natural for Emirates to take advantage of export credit if it is provided and said it was up to the governments if they chose to support their industries.

His airline has also repeatedly denied claims by rival European carriers that its fuel bills are subsidized.

"I have said 'you prove a subsidy and I will resign the next day'. It is completely wrong," Clark said.

An association of European airlines is due to meet in London on Friday to discuss the export credits issue.

Clark said, "If they spend as much time running their business as they do trying to run us down they might make even more money."

European airlines say financing rules mean European taxpayers are funding the growth of airlines such as Emirates through export aid denied to their own carriers.

Reuters

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