The cancellation of 32 orders for Boeing 737s this week appears to have been by Dubai Aerospace Enterprise (DAE), and more order retractions could be coming from the airplane lessor, an analyst said on Friday.
Boeing declined to comment on Friday and has not identified the customer that canceled the order, potentially worth more than $2 billion. DAE representatives were not immediately available to comment.
But experts note that DAE’s orders for the narrowbody 737 have dwindled to 35 from 67 in December. Airplane orders from DAE have been in question since the 2009 Dubai financial crisis.
“Most of the DAE orders have been dead in reality for a couple of years now,” said Teal Group aerospace analyst Richard Aboulafia. “I simply wouldn’t bank on any of their orders.”
DAE currently has orders for 56 undelivered Boeing aircraft listed on the planemaker’s website, mostly for the 737. The 737, Boeing’s best-selling model, is priced at $56.9 million to $85.8 million each.
Last year, DAE slashed an order for 100 passenger jets, built by Boeing’s European rival Airbus EADS, by 25 percent in volume terms. The cancellations amounted to about $3 billion in orders.
Leasing companies were rocked by the financial crisis, although some returned with bulk orders for narrow-body planes last year as the airline and aerospace industry saw a rebound.
Dubai, a regional financial and trade hub, established DAE in February 2006. Through several acquisitions, the company has grown into a global aerospace giant with operations.
Shares of Boeing were up 0.6 percent at $71.40 on the New York Stock Exchange.
