Airbus signed a $49.5 billion deal on Wednesday in Dubai, United Arab Emirates, on Wednesday to sell 430 airplanes to the Phoenix-based private equity firm that owns Frontier Airlines, striking the European aerospace company’s biggest deal ever at the Dubai Air Show. From left: Barry Biffle, chief executive officer of Frontier Airlines; Barry Eccleston, president of Airbus Americas: Bill Franke, managing partner of Indigo Partners; John Leahy, chief operating officer of Airbus; Jozsef Varadi, chief executive officer of Wizz Air: Enrique Beltranena, founder and CEO of Volaris; and Estuardo Ortiz, CEO of JetSMART. (AP Photo/Kamran Jebreili)

Airbus signed a $49.5 billion deal on Wednesday in Dubai, United Arab Emirates, on Wednesday to sell 430 airplanes to the Phoenix-based private equity firm that owns Frontier Airlines, striking the European aerospace company’s biggest deal ever at the Dubai Air Show. From left: Barry Biffle, chief executive officer of Frontier Airlines; Barry Eccleston, president of Airbus Americas: Bill Franke, managing partner of Indigo Partners; John Leahy, chief operating officer of Airbus; Jozsef Varadi, chief executive officer of Wizz Air: Enrique Beltranena, founder and CEO of Volaris; and Estuardo Ortiz, CEO of JetSMART. (AP Photo/Kamran Jebreili)

Epic deals in Dubai for Airbus ($49B) and Boeing ($27B)

Frontier’s parent is buying 430 A320s in the biggest Airbus sale ever, and FlyDubai will buy 225 737s.

By Jon Gambrell / Associated Press

DUBAI, United Arab Emirates — Airbus signed a $49.5 billion deal on Wednesday to sell 430 airplanes to the Phoenix-based private equity firm that owns Frontier Airlines, striking the European aerospace firm’s biggest deal ever at the Dubai Air Show.

Meanwhile, Boeing reached an agreement with low-cost carrier FlyDubai to sell 225 Boeing 737 MAX 10 aircraft — a deal valued at $27 billion. The biennial air show closes on Thursday.

“It’s ended up going out on a high,” airline analyst John Strickland of JLS Consulting said. “It shows once again the importance of this part of the world to the big airplane manufacturers.”

The Airbus deal with Indigo Partners will split 273 A320neos and 157 A321neos among Denver-based Frontier, JetSMART of Chile, Volaris of Mexico and Wizz Air of Hungary, all ultra-low-cost airlines associated with Indigo.

The A320neo and the A321neo are twin-engine, single-aisle planes popular among airlines because of their reduced fuel consumption.

The surprise announcement came after Airbus on Sunday suffered the embarrassment of believing it had struck a major deal with the state-owned carrier Emirates to sell its A380 double-decker jumbo jet, only to see Boeing sit on the podium with the airline and sign a $15.1 billion deal.

“Just to clarify: This is not an A380 press conference,” joked John Leahy, Airbus’ sales chief, at the start of the announcement.

A320neos list for $108.4 million apiece and A321neos at $127 million. Airlines and manufacturers negotiate lower prices for big deals like these, something Indigo’s managing partner Bill Franke was quick to stress afterward.

“Here’s hoping,” he told reporters. “Their objective is to sell aircraft at the best possible and our objective is to buy aircraft at the best possible price. I’ve known Mr. Leahy for 25 years. Sometimes he wins, sometimes I win.”

Asked if he won this round, Franke said: “That’ll be a good question.”

Airbus’ previous biggest-ever sale came in August 2015, when it sold 250 A320neos to Indian budget airline IndiGo, a deal estimated to be worth $26 billion at list prices. IndiGo and Indigo Partners are separate firms with separate management.

Shares in Airbus rose on the news, closing 2.4 percent higher at 85.58 euros in Paris.

Franke is a pioneer of the cheap ticket and high fee airline business that has spread overseas and is growing in the United States. Such carriers offer low base fares but add fees to stow a carry-on bag, get an assigned seat and for other extras. That’s led to soaring customer complaints against Frontier.

President Donald Trump also came up in Franke’s conversation with journalists on Thursday, as Franke said the American leader would be happy to know the A321neos purchased by Indigo would undergo final assembly in the Airbus plant in Mobile, Alabama.

Shortly after, FlyDubai and Chicago-based Boeing Co. announced their $27 billion deal. FlyDubai said the planes would bring the low-cost carrier’s total fleet on order up to 320. FlyDubai has begun to code-share flights with Emirates. Both are owned by Dubai’s government.

The Boeing 737 MAX 10, a twin-engine, single aisle plane capable of carrying 230 passengers, has a list price of $124.7 million. They’ll complement FlyDubai’s fleet of Boeing 737s and keep them a Boeing-only shop, something Airbus no doubt had hoped to change.

“Today marks the next chapter in FlyDubai’s success story,” FlyDubai CEO Ghaith al-Ghaith said.

Until Wednesday, the only major deal announced at the Dubai Air Show came on Sunday, when long-haul carrier Emirates purchased 40 Boeing 787-10 Dreamliners in a $15.1 billion deal.

That deal also saw Emirates CEO and Chairman Sheikh Ahmed bin Saeed Al Maktoum bring up the 787-10 buy’s ability to create jobs. Trump himself promoted that during a February visit to the South Carolina plant that builds the carbon-fiber, 330-seat plane.

Airbus, which is based in Toulouse, France, has pinned hopes of continuing production of its A380 double-decker jumbo jet on Emirates, the world’s largest operator of the aircraft. Reports circulated before the air show that a major A380 sale would be coming.

Airbus employees even filled a news conference on Sunday, expecting the A380 sale, instead to find state-owned Emirates making the deal with Boeing in front of Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum.

Strickland said that while the massive Airbus sale Wednesday likely took months to negotiate, it still helped Airbus save face at the air show.

“It would have been great relief,” the analyst said.

Emirates now relies solely on the Airbus 380 and the Boeing 777 for its flights, making it the largest operator of both. It has 165 Boeing 777s in its fleet today and took possession of its 100th A380 earlier this month.

The Emirates’ snub came up at the news conference Wednesday, when a reporter asked Airbus if another deal could be coming.

“I think you’ve got to walk over to the chalet with Emirates on the door and ask them,” Airbus’ Leahy said.

Talk to us

More in Herald Business Journal

Exterior of the new Quil Ceda Creek Casino on Thursday, Jan. 21, 2020 in Marysville, Wa. (Olivia Vanni / The Herald)
Tulalip Tribes reach deal with state on sports betting

If all goes to plan, the tribes could get federal approval for sports books at two casinos by the fall.

Demolition of the YMCA in downtown continues on Tuesday, April 13, 2021 in Everett, Wa. (Olivia Vanni / The Herald)
Apartments will rise from the site of the former YMCA annex

In all, 260 units are planned for the downtown Everett site. The older brick building will remain.

Rescuers carry a part of aircraft recovered from Java Sea where a Sriwijaya Air passenger jet crashed, at Tanjung Priok Port in Jakarta, Indonesia, Monday, Jan. 11, 2021. The search for the black boxes of a crashed Sriwijaya Air jet intensified Monday to boost the investigation into what caused the plane carrying dozens of people to nosedive at high velocity into the Java Sea. (AP Photo/Dita Alangkara)
Lawsuit over 737 crash alleges autothrottle malfunction

A preliminary report indicates that pilots had repeatedly reported the problem days earlier.

FILE - In this Oct. 1, 2020 file photo, traffic passes the Boeing airplane production plant, in Everett, Wash.  U.S. manufacturers expanded in March 2021 at the fastest pace in 37 years, a sign of strengthening demand as the pandemic wanes and government emergency aid flows through the economy.  (AP Photo/Elaine Thompson, file)
Boeing sees uptick in airplane orders as travel picks up

The company in April delivered 19 Maxes, three 737s for military use and seven larger widebody planes.

Signs from the Department of Ecology warning about contamination in the creek that runs through Powder Mill Gulch on Wednesday, March 31, 2021 in Everett, Wa. (Olivia Vanni / The Herald)
State order targets Boeing Everett plant’s polluted history

Records show a dispute over cleanup requirements for chemically tainted water. The company denies there’s a disagreement.

FILE- In this Sept. 30, 2020, file photo, a Boeing 737 Max jet, piloted by Federal Aviation Administration (FAA) chief Steve Dickson, prepares to land at Boeing Field following a test flight in Seattle. Boeing says it has informed 16 of its customers that they should address a possible electrical issue in certain 737 Max aircraft before using them further. Boeing said Friday, April 9, 2021, that the recommendation was made “to allow for verification that a sufficient ground path exists for a component of the electrical power system.” (AP Photo/Elaine Thompson, File)
Boeing: possible electrical issue in some 737 Max aircraft

The company said that the new problem was unrelated to the flight-control system.

The 214-foot tall cranes work to unload their first cargo shipments at South Terminal at the Port of Everett on Thursday, April 8, 2021 in Everett, Wa. (Olivia Vanni / The Herald)
Renovated Port of Everett terminal gets first cargo customer

The 655-foot Westwood Columbia is the first ship to call at the newly upgraded South Terminal dock.

Project Roxy is a proposed 2.8 million square foot distribution center that would be built on a 75-acre parcel at the Cascade Industrial Center. The rendering depicts the proposed project at 4620 172nd Street in Arlington from a northwest perspective.
1,000 jobs: Amazon to open distribution center in Arlington

The company is the tenant behind Project Roxy, a $355 million building at the Cascade Industrial Center.

Edmonds grocery store workers may soon earn hazard pay

Some employers are required to increase wages by $4 an hour, the city council voted Tuesday.

Aerospace supplier with Everett site files for bankruptcy

Wichita-based TECT Aerospace filed for Chapter 11 and plans to sell an Everett manufacturing facility.

Washington's Lottery ticket display. (Andrea Brown / The Herald)
Want to get lucky? Washington’s Lottery lists Top 10 stores

One of the luckiest retailers in the state was a Safeway in Everett, as measured by $1,000-plus winners.

What local firms are doing to promote diversity and equity

Here’s how some of Snohomish County’s biggest companies and organizations say they are making a difference.