Etihad to cancel a "significant amount" of A350 Order according to Aviation Analyst

JamesCousins · Wed Oct 17, 2018 5:06 pm

According to an Exclusive from Alex Macheras, a very credible source in the industry, Etihad are to cancel some of their order for over 60 Airbus A350s.

In what is set to be the latest and largest cut at the Abu Dhabi airline, and after talks with six credible sources, I can now exclusively reveal that Etihad Airways will be cancelling a ‘significant amount’ of its existing Airbus order — with cancellations set to hit the UAE carriers’ Airbus A350 order, for 62 A350 XWB aircraft, consisting of 40 Airbus A350-900s, and 22 Airbus A350-1000s.

This is a sad to read, but unsurprising...

Source: https://aviationanalyst.co.uk/2018/10/1 ... bus-a350s/

Armodeen · Wed Oct 17, 2018 5:20 pm

Please edit the title to reflect the partial nature of the cancellation.

Sad but expected news. I predict it will be all the 900s.

Next up the 77Xs.

*edit* thanks

xwb777 · Wed Oct 17, 2018 5:30 pm

I heard a rumor that they will be operating a fleet of 10 aircraft only.

casinterest · Wed Oct 17, 2018 5:33 pm

Armodeen wrote:
Please edit the title to reflect the partial nature of the cancellation.

Sad but expected news. I predict it will be all the 900s.

Next up the 77Xs.

*edit* thanks

Actually it looks like all of the A350's are going. Per the article they will probably keep their relationship (AKA the A321 neo) with some orders.

They are trying to finance their remaining purchases of 787s.

I think the 777X is going to get deferred or cancelled as well.

Sooner787 · Wed Oct 17, 2018 5:36 pm

Any bets on when they EK/ EY merger is announced?

JamesCousins · Wed Oct 17, 2018 5:39 pm

Sooner787 wrote:
Any bets on when they EK/ EY merger is announced?

While I don't doubt its probability, would EK really want it? They encapsulate streamlined fleets really nice, with just the 77L, 77W and A388. I know they could return some leased A/C to streamline a merged fleet, and that the 787s would come in handy, but I am sceptical

Prost · Wed Oct 17, 2018 5:40 pm

With their change in business plans, the 777X seem superfluous to their needs. I hope Etihad finds their niche.

xwb777 · Wed Oct 17, 2018 5:41 pm

Sooner787 wrote:
Any bets on when they EK/ EY merger is announced?

I doubt EK is ready to absorb Etihad losses.

Redwood839 · Wed Oct 17, 2018 5:44 pm

Hopefully they don't go away. They got a nice product, an amazing livery. I'm not from a ME country but man that "From Abu Dhabi to the World" slogan is catchy.

gatibosgru · Wed Oct 17, 2018 5:50 pm

No real surprise there. Who will take those slots?

Sooner787 · Wed Oct 17, 2018 5:57 pm

Another question......are EY's A380's leased or owned by the carrier?

Peterwk146 · Wed Oct 17, 2018 6:00 pm

Sooner787 wrote:
Another question......are EY's A380's leased or owned by the carrier?

May I ask what's this to do with the topic?

PlanesNTrains · Wed Oct 17, 2018 6:02 pm

Peterwk146 wrote:
Sooner787 wrote:
Another question......are EY's A380's leased or owned by the carrier?

May I ask what's this to do with the topic?

Fleet strategy.

MSPNWA · Wed Oct 17, 2018 6:07 pm

Rough times at EY. With their plan to be more of a point-to-point carrier, my guess is that if the A350s are on the chopping block, the 777Xs will be one day as well. Like the article states, it's more like the ME2 now.

Arion640 · Wed Oct 17, 2018 6:08 pm

This was inevitable. Sad, but it became apparent years ago with the extreme over ordering something was going to happen.

ACCS300 · Wed Oct 17, 2018 6:14 pm

ME3 quickly becoming ME2

Perhaps EK with re-think their A350 strategy and pick some of these slots up.

Swadian · Wed Oct 17, 2018 6:20 pm

ACCS300 wrote:
ME3 quickly becoming ME2

What about TK? I guess they're not really in the ME?

EY set to become the next Gulf Air.

OGLOBAL · Wed Oct 17, 2018 6:20 pm

it's sad to see them struggle i mean if with QR blockade they are suffering they would basically disappear once the blockade ends ...
they need to find a niche market maybe create a low cost serve smaller markets and in the region and Etihad for longer routes i remember QR used to serve the most cities in Saudi .

MIflyer12 · Wed Oct 17, 2018 6:22 pm

gatibosgru wrote:
No real surprise there. Who will take those slots?

Sixty is a big order. If you want to believe Wikipedia (I know...) today's biggest operators of A350s are Qatar (32), CX (26) and SQ (23).

Prost · Wed Oct 17, 2018 6:22 pm

TK needs to have the new IST to take the mantle of ME3, and even then I’d argue they’d be part of the Euro4. I don’t understand what EY mean by point to point flying. They only have one point on one end, so their route structure will always be a de facto hub and spoke. Do they mean they won’t set up their schedule for connections?

xwb777 · Wed Oct 17, 2018 6:25 pm

I wonder what is James Hogan's reaction when he hears and reads such news?

OA940 · Wed Oct 17, 2018 6:37 pm

They'll probably keep the -1000s, since (at least according to wiki) they're due to come in starting this year...

behramjee · Wed Oct 17, 2018 6:37 pm

Long term if they remain solvent, their fleet should just be B781s, B789s and A320/321Neo family.

Just two aircraft family types leading to company wide efficiencies across the board.

Their B789s can fly IAD JFK YYZ SYD MEL without too many payload issues as those would be the longest flights. 789s would also serve majority of current EU Asia routes currently flown by WB acft.

781s can be in both 3 class for premium routes and 2 class HD for the leisure VFR services to ISC JED Far East.

Just my opinion above...

aemoreira1981 · Wed Oct 17, 2018 6:38 pm

xwb777 wrote:
I wonder what is James Hogan's reaction when he hears and reads such news?

Everything is fine (fire raging around him).

rdombrov · Wed Oct 17, 2018 6:38 pm

xwb777 wrote:
I wonder what is James Hogan's reaction when he hears and reads such news?

Guilty conscience?

smartplane · Wed Oct 17, 2018 7:24 pm

casinterest wrote:
Armodeen wrote:
Please edit the title to reflect the partial nature of the cancellation.

Sad but expected news. I predict it will be all the 900s.

Next up the 77Xs.

*edit* thanks

Actually it looks like all of the A350's are going. Per the article they will probably keep their relationship (AKA the A321 neo) with some orders.

They are trying to finance their remaining purchases of 787s.

I think the 777X is going to get deferred or cancelled as well.

Unless the same entities are financing A350's and 787's (they aren't), to maximise co-operation from OEM's and financiers, cancellations will need to be even-handed across both brands, so shared (pro-rata) 787 and A350 pain.

A359 and 777X orders are still conditional. If the A359 is gone, unlikely Airbus will tolerate 777's going unconditional, or vice versa.

Billion dollar question, is to what extent did EK negotiate an ME2 or ME3 price on the 777X, and will it unravel if the Etihad order doesn't proceed?

BlueSky1976 · Wed Oct 17, 2018 8:10 pm

Things could turn out in a very interesting way.
EK could end up picking up all of EY's A350 order and cancel their own LOI for 787s, if Airbus and Rolls Royce offer the deal EK cannot refuse. I won't be surprised if the EK's A380 "order at risk" report is just a smokescreen to hide a much bigger deal in the works.

After all, EK's "order" for 787 is still just a LOI.

lightsaber · Wed Oct 17, 2018 8:19 pm

smartplane wrote:
casinterest wrote:
Armodeen wrote:
Please edit the title to reflect the partial nature of the cancellation.

Sad but expected news. I predict it will be all the 900s.

Next up the 77Xs.

*edit* thanks

Actually it looks like all of the A350's are going. Per the article they will probably keep their relationship (AKA the A321 neo) with some orders.

They are trying to finance their remaining purchases of 787s.

I think the 777X is going to get deferred or cancelled as well.

Unless the same entities are financing A350's and 787's (they aren't), to maximise co-operation from OEM's and financiers, cancellations will need to be even-handed across both brands, so shared (pro-rata) 787 and A350 pain.

A359 and 777X orders are still conditional. If the A359 is gone, unlikely Airbus will tolerate 777's going unconditional, or vice versa.

Billion dollar question, is to what extent did EK negotiate an ME2 or ME3 price on the 777X, and will it unravel if the Etihad order doesn't proceed?

I thought EK did a ME2 deal on the 777x with QR...

As to unraveling unequally, that unfortunately makes sense. At this point it is time to pay penalties.

That said, EY should simplify to the A380, 787-10, 789 , and A320/321. If they cannot fill A380s on the Kangaroo route, they are doing worse than I thought.

As to EK/EY merger... :no: unless:
1. DWC is expanded to the boarder. At least a monorail connecting DWC and Abu Dhabi's new airport. With DWC built out to meet both Airline's needs with secure ground transportation lanes (for aircraft too) between the two.
2. EY's debts are covered.
3. Control is given to EK.

Sadly, I'm not thinking EY nor QR are ready for the competition the new IST shall bring. Someday. :duck:

Lightsaber

bunumuring · Wed Oct 17, 2018 8:33 pm

BlueSky1976 wrote:
Things could turn out in a very interesting way.
EK could end up picking up all of EY's A350 order and cancel their own LOI for 787s, if Airbus and Rolls Royce offer the deal EK cannot refuse. I won't be surprised if the EK's A380 "order at risk" report is just a smokescreen to hide a much bigger deal in the works.

After all, EK's "order" for 787 is still just a LOI.

Hey mate,
I totally agree with you. This is how I see things panning out over the next twelve months or so. The next Dubai air show could be newsworthy NOT for new aircraft orders but a complete shakeup of existing orders.
I do hope however that Emirates firm up their Dreamliner 10s....
Cheers
Bunumuring

PlanesNTrains · Wed Oct 17, 2018 8:49 pm

BlueSky1976 wrote:
Things could turn out in a very interesting way.
EK could end up picking up all of EY's A350 order and cancel their own LOI for 787s, if Airbus and Rolls Royce offer the deal EK cannot refuse. I won't be surprised if the EK's A380 "order at risk" report is just a smokescreen to hide a much bigger deal in the works.

After all, EK's "order" for 787 is still just a LOI.

Never say never, particularly with the ME3, but....

A350 (some/all) order canceled with apparently multiple sources
787 attempting to be financed with apparently multiple sources
EK potentially not taking recent A380 order with apparently at least one source
...NO?

But...

EK order for 787 to be replaced by EY order for A350 (no source)
EK potentially not taking A380 is just a smokescreen (no source)
...YES?

Asking for a friend.

bigjku · Wed Oct 17, 2018 8:50 pm

bunumuring wrote:
BlueSky1976 wrote:
Things could turn out in a very interesting way.
EK could end up picking up all of EY's A350 order and cancel their own LOI for 787s, if Airbus and Rolls Royce offer the deal EK cannot refuse. I won't be surprised if the EK's A380 "order at risk" report is just a smokescreen to hide a much bigger deal in the works.

After all, EK's "order" for 787 is still just a LOI.

Hey mate,
I totally agree with you. This is how I see things panning out over the next twelve months or so. The next Dubai air show could be newsworthy NOT for new aircraft orders but a complete shakeup of existing orders.
I do hope however that Emirates firm up their Dreamliner 10s....
Cheers
Bunumuring

There are a few flawed assumptions there.

One is that RR can/will offer a deal on the A350 it won’t match on the 787. That would be a risky risky move on their part for a variety of reasons that should be obvious on some reflection.

Two is thinking thag EK didn’t reject the A350 for good reasons in the first place. The 787-10 isn’t really a plane that has an A350 equal. Ordering it says they want regional capacity at very low per seat cost. The A350 didn’t win that argument before so why would things suddenly change?

Three is that EK cares at all about picking up orders for another airline. This seems like unsupported speculation.

kevin5345179 · Wed Oct 17, 2018 9:41 pm

bigjku wrote:
bunumuring wrote:
BlueSky1976 wrote:
Things could turn out in a very interesting way.
EK could end up picking up all of EY's A350 order and cancel their own LOI for 787s, if Airbus and Rolls Royce offer the deal EK cannot refuse. I won't be surprised if the EK's A380 "order at risk" report is just a smokescreen to hide a much bigger deal in the works.

After all, EK's "order" for 787 is still just a LOI.

Hey mate,
I totally agree with you. This is how I see things panning out over the next twelve months or so. The next Dubai air show could be newsworthy NOT for new aircraft orders but a complete shakeup of existing orders.
I do hope however that Emirates firm up their Dreamliner 10s....
Cheers
Bunumuring

There are a few flawed assumptions there.

One is that RR can/will offer a deal on the A350 it won’t match on the 787. That would be a risky risky move on their part for a variety of reasons that should be obvious on some reflection.

Two is thinking thag EK didn’t reject the A350 for good reasons in the first place. The 787-10 isn’t really a plane that has an A350 equal. Ordering it says they want regional capacity at very low per seat cost. The A350 didn’t win that argument before so why would things suddenly change?

Three is that EK cares at all about picking up orders for another airline. This seems like unsupported speculation.

because EK later said they are looking to covert -10s to -9s for greater range and the requirement they are "hoping" to have sounds exactly like A350 to started with ....... which is extremely weird IMHO

bunumuring · Wed Oct 17, 2018 10:04 pm

Hey guys,
I wonder if Etihad's part-owned Virgin Australia could end up with 'something' from any potential shake up of Etihad's order book? VIrgin Australia arguably needs more wide bodies even though it isn't the best financial shape and Singapore Airlines and HNA group would also have to approve it as shareholders. Switching some orders to them might be a 'compromise' in a deal to cancel other Etihad orders.
Just me thinking out loud...
Cheers
Bunumuring

hkcanadaexpat · Wed Oct 17, 2018 10:22 pm

OA940 wrote:
They'll probably keep the -1000s, since (at least according to wiki) they're due to come in starting this year...

next year actually

EChid · Wed Oct 17, 2018 10:45 pm

bunumuring wrote:
Hey guys,
I wonder if Etihad's part-owned Virgin Australia could end up with 'something' from any potential shake up of Etihad's order book? VIrgin Australia arguably needs more wide bodies even though it isn't the best financial shape and Singapore Airlines and HNA group would also have to approve it as shareholders. Switching some orders to them might be a 'compromise' in a deal to cancel other Etihad orders.
Just me thinking out loud...
Cheers
Bunumuring

I mean, I like VA but their long-haul ops are not particularly profitable, neither new planes or new routes make sense. Their 77Ws are no older than 10 years and their A330s are even younger.

MIflyer12 · Wed Oct 17, 2018 10:48 pm

smartplane wrote:
casinterest wrote:
Armodeen wrote:
Please edit the title to reflect the partial nature of the cancellation.

Sad but expected news. I predict it will be all the 900s.

Next up the 77Xs.

*edit* thanks

Actually it looks like all of the A350's are going. Per the article they will probably keep their relationship (AKA the A321 neo) with some orders.

They are trying to finance their remaining purchases of 787s.

I think the 777X is going to get deferred or cancelled as well.

Unless the same entities are financing A350's and 787's (they aren't), to maximise co-operation from OEM's and financiers, cancellations will need to be even-handed across both brands, so shared (pro-rata) 787 and A350 pain.

Why would financing parties - unless they are B and Airbus directly - care about such a thing?

danipawa · Wed Oct 17, 2018 10:55 pm

lot of B787 undelivered for Etihad yet...they can base their grow with them

neutronstar73 · Wed Oct 17, 2018 11:11 pm

I love the "well, Etihad cancels their A350s, so it MUST mean they HAVE to cancel the 777Xs, too! Why? Because it wouldn't be fair to Airbus, that's why!" or the "EK will cancel the 787-10s they evaluated and ordered but didn't really want in order to pick the bones of Etihad's A350s because RR and Airbus will make an offer they didn't make last time for aircraft that EK decided didn't fit their needs! Of course!!"

This is all just silly. Etihad will cancel whichever aircraft they feel they can't afford or don't need right now, not based on "sharing the pain" for both OEMs. If that's the case, they'd order equal quantities of aircraft from both OEMs all the time...to "share the love". Otherwise, this is just fanboy wishful thinking.

PlanesNTrains · Wed Oct 17, 2018 11:14 pm

neutronstar73 wrote:
I love the "well, Etihad cancels their A350s, so it MUST mean they HAVE to cancel the 777Xs, too! Why? Because it wouldn't be fair to Airbus, that's why!" or the "EK will cancel the 787-10s they evaluated and ordered but didn't really want in order to pick the bones of Etihad's A350s because RR and Airbus will make an offer they didn't make last time for aircraft that EK decided didn't fit their needs! Of course!!"

This is all just silly. Etihad will cancel whichever aircraft they feel they can't afford or don't need right now, not based on "sharing the pain" for both OEMs. If that's the case, they'd order equal quantities of aircraft from both OEMs all the time...to "share the love". Otherwise, this is just fanboy wishful thinking.

If they are trying to downsize, losing the 777X doesn’t seem unreasonable. They have the A380 for heavy trunk routes and a plethora of other wide bodies for everything else.

ER757 · Wed Oct 17, 2018 11:33 pm

BlueSky1976 wrote:
Things could turn out in a very interesting way.
EK could end up picking up all of EY's A350 order and cancel their own LOI for 787s, if Airbus and Rolls Royce offer the deal EK cannot refuse. I won't be surprised if the EK's A380 "order at risk" report is just a smokescreen to hide a much bigger deal in the works.

After all, EK's "order" for 787 is still just a LOI.

Oh boy.... a couple months ago we had Boeing fanboys telling anyone who would listen that Air Asia was going to cancel their Airbus widebody order and take 787's instead. Now we have Airbus fanboys with a fever dream where EK not only takes EY's A350's, they cancel their 787's too. Ain't. Gonna. Happen.

As to those predicting the imminent EK/EY merger/buyout whatever - I don't see it. EK has nothing to gain by doing so. They don't need EY's debt, their outstanding aircraft on order, their route network, their hub...nothing. EK is far better off letting EY wither on the vine.

neutronstar73 · Wed Oct 17, 2018 11:42 pm

PlanesNTrains wrote:
neutronstar73 wrote:
I love the "well, Etihad cancels their A350s, so it MUST mean they HAVE to cancel the 777Xs, too! Why? Because it wouldn't be fair to Airbus, that's why!" or the "EK will cancel the 787-10s they evaluated and ordered but didn't really want in order to pick the bones of Etihad's A350s because RR and Airbus will make an offer they didn't make last time for aircraft that EK decided didn't fit their needs! Of course!!"

This is all just silly. Etihad will cancel whichever aircraft they feel they can't afford or don't need right now, not based on "sharing the pain" for both OEMs. If that's the case, they'd order equal quantities of aircraft from both OEMs all the time...to "share the love". Otherwise, this is just fanboy wishful thinking.

If they are trying to downsize, losing the 777X doesn’t seem unreasonable. They have the A380 for heavy trunk routes and a plethora of other wide bodies for everything else.

I'm not saying that it is unreasonable; I'm saying that just because "A" does not equal "B". Who knows what they'll do. Maybe their 777X deal is structured differently, maybe they'll scuttle the whole order and everything else, too. What I'm saying is that just because they do something to one party, Etihad MUST do something the same to another party. Those two entities are completely different.

PlanesNTrains · Wed Oct 17, 2018 11:56 pm

neutronstar73 wrote:
PlanesNTrains wrote:
neutronstar73 wrote:
I love the "well, Etihad cancels their A350s, so it MUST mean they HAVE to cancel the 777Xs, too! Why? Because it wouldn't be fair to Airbus, that's why!" or the "EK will cancel the 787-10s they evaluated and ordered but didn't really want in order to pick the bones of Etihad's A350s because RR and Airbus will make an offer they didn't make last time for aircraft that EK decided didn't fit their needs! Of course!!"

This is all just silly. Etihad will cancel whichever aircraft they feel they can't afford or don't need right now, not based on "sharing the pain" for both OEMs. If that's the case, they'd order equal quantities of aircraft from both OEMs all the time...to "share the love". Otherwise, this is just fanboy wishful thinking.

If they are trying to downsize, losing the 777X doesn’t seem unreasonable. They have the A380 for heavy trunk routes and a plethora of other wide bodies for everything else.

I'm not saying that it is unreasonable; I'm saying that just because "A" does not equal "B". Who knows what they'll do. Maybe their 777X deal is structured differently, maybe they'll scuttle the whole order and everything else, too. What I'm saying is that just because they do something to one party, Etihad MUST do something the same to another party. Those two entities are completely different.

I think there are likely valid reasons for people speculating as such. I guess there are probably a few saying the 777X MUST be cut but for the most part we’re all just speculating.

musman9853 · Thu Oct 18, 2018 12:02 am

BlueSky1976 wrote:
Things could turn out in a very interesting way.
EK could end up picking up all of EY's A350 order and cancel their own LOI for 787s, if Airbus and Rolls Royce offer the deal EK cannot refuse. I won't be surprised if the EK's A380 "order at risk" report is just a smokescreen to hide a much bigger deal in the works.

After all, EK's "order" for 787 is still just a LOI.

there's no way this is happening lol. ek didnt cancel their a350 order just to turn around a few years later and order it again. I know you're really biased against boeing, but they have been the more successful manufacturer in the last few years and there doesnt seem to be any indications of that changing anytime soon.

questions · Thu Oct 18, 2018 12:48 am

How does Airbus re-prioritize the backlog when an order is cancelled? Since delivery dates are negotiated for different times for aircraft in the order, are open slots offered to every airline to negotiate for? Do airlines bid and potentially pay more (e.g., because of demand) or less (e.g., because of manufacturing supply) for the aircraft because of a new slot?

juliuswong · Thu Oct 18, 2018 1:22 am

EChid wrote:
bunumuring wrote:
Hey guys,
I wonder if Etihad's part-owned Virgin Australia could end up with 'something' from any potential shake up of Etihad's order book? VIrgin Australia arguably needs more wide bodies even though it isn't the best financial shape and Singapore Airlines and HNA group would also have to approve it as shareholders. Switching some orders to them might be a 'compromise' in a deal to cancel other Etihad orders.
Just me thinking out loud...
Cheers
Bunumuring

I mean, I like VA but their long-haul ops are not particularly profitable, neither new planes or new routes make sense. Their 77Ws are no older than 10 years and their A330s are even younger.

Yes, VA doesn't seems to have the mass feed for their international network compared to Qantas. Their network is minuscule too. They can't afford to have a large fleet of widebodies at their current financial situation. Now that they managed to eke out a tiny profit, best to continue current improvement rather than spending more blings on grandiose plan.

LAX772LR · Thu Oct 18, 2018 3:33 am

smartplane wrote:
If the A359 is gone, unlikely Airbus will tolerate 777's going unconditional, or vice versa.

What does that tangibly mean though?

Doubtful that they have legal recourse beyond industry standard, and in the absence of such, who would care what they "tolerate?"

MrHMSH · Thu Oct 18, 2018 3:38 am

It's a shame, though it seems that at least a few A350s will squeeze their way in, if that is the case I'm looking forward to seeing the A350 in the EY livery. Fairly desperate times at the company but their plans were quite ambitious to start with.

seabosdca · Thu Oct 18, 2018 4:39 am

Will be interesting to see which A350s are cancelled. I think that will tell us more about the fate of the 77X.

In any event, on the widebody front, EY should take delivery of 787s first and defer everything else. The 787-9 could fly every widebody route in their network in a pinch. The same is not true for the bigger stuff.

StudiodeKadent · Thu Oct 18, 2018 4:47 am

I'd have expected the 777X to be cancelled instead of the A350, but I hope whatever Etihad does they manage to stabilize themselves.

SurlyBonds · Thu Oct 18, 2018 4:57 am

Swadian wrote:
ACCS300 wrote:
ME3 quickly becoming ME2

What about TK? I guess they're not really in the ME?.

Turkey is not the Middle East!

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