Yesterday, all-Boeing 737 operator FlyDubai placed an order for up to 150 Airbus A321neos. Today, the airline has announced an order for up to 150 Boeing 737 MAXs. Am I the only one who is starting to wonder if this isn’t all a bit much, or what exactly the play is?
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FlyDubai plans to massively expand Boeing 737 MAX fleet
FlyDubai has signed a Memorandum of Understanding (MoU) for its fourth-ever Boeing 737 MAX purchase. Specifically, the airline intends to place a firm order for 75 frames, with options for an additional 75 frames.
The company emphasizes that it has the flexibility to have this order be for the 737 MAX 8, 737 MAX 9, or 737 MAX 10 (which hasn’t yet been certified). Since the order hasn’t yet been finalized, exact details about the delivery timeline remain to be seen… obviously that’s an important detail here.
Here’s how FlyDubai Chairman Ahmed bin Saeed Al Maktoum describes this development:
“We are pleased to announce a new aircraft order agreement with Boeing. Looking ahead, proactive fleet planning is essential to ensuring we are well-placed to meet the rising demand for travel, a demand we are confident will continue to grow. Anticipating future needs is a defining factor in the success of any airline and today’s announcement reflects our commitment to that principle.”
For context, FlyDubai’s fleet currently consists of close to 100 Boeing 737s, including the 737-800, 737 MAX 8, and 737 MAX 9. Prior to this week, the airline had nearly 120 737 MAXs on order, split between the 737 MAX 8 and 737 MAX 9. Furthermore, last year the airline ordered 30 Boeing 787-9s, marking the carrier’s first wide body order.
Now we’ve seen the airline order up to 150 A321neos (115 firm orders and 35 options), plus up to 150 737 MAXs (75 planned firm orders and 75 options).
Just to crunch some numbers, if you take the 737-800s out of the equation (since those will eventually be retired):
- FlyDubai currently has 68 737 MAXs, and already had 118 737 MAXs on order
- Then FlyDubai ordered 30 787-9s last year
- Then this week FlyDubai ordered at least 115 A321neos and at least 75 737 MAXs, not accounting for the 110 options for the two aircraft types
So if my math is correct, FlyDubai currently has under 100 planes, and now has firm plans to acquire 338 planes, for a total fleet of nearly 440 planes. So the airline wants to more than quadruple in size.
Is FlyDubai growing this big a wise business decision?
Yesterday, Boeing had a press release stating that its commercial market outlook shows regional aircraft fleets in the Middle East doubling in the next 20 years. Now, it’s anyone’s guess how that plays out, because obviously Boeing has a vested interest in the demand for planes increasing. 😉
But a lot of airlines seem to have a similar outlook. Admittedly the details vary based on which airline you ask. If you ask an airline in Saudi Arabia, they say they’ll see most of the growth. Meanwhile FlyDubai sees huge growth potential in Dubai (shocker!), and these planes are also being ordered in anticipation of the eventual move to Dubai World Central Airport (DWC).
What I find interesting with this growth is that Emirates and FlyDubai are separate companies, but they’re both owned by the government of Dubai. The airlines have a partnership, and historically, they’ve largely had complementary networks. FlyDubai has largely flown to places that Emirates’ wide body planes can’t and don’t fly to (either due to airport constraints or demand). That’s not the case across the board, but it does make up a big part of FlyDubai’s network.
As FlyDubai grows its fleet to hundreds of planes, will the airline just increasingly replicate Emirates’ route network? And given that FlyDubai isn’t a low cost carrier, and has pricing comparable to Emirates, how exactly will market positioning work?
I’d understand this strategy more if FlyDubai were some ultra low cost carrier going after a different market segment, but that’s not the case. I maintain my belief that Emirates and FlyDubai will eventually merge, maybe coinciding with the move to Dubai World Central (probably not sooner, unless there’s a major economic downturn), and will become the world’s largest airline.
Bottom line
FlyDubai seemingly plans to more than quadruple in size, eventually, if all of these orders are to be believed. We knew that FlyDubai planned to grow over time, but the airline is now looking at a fleet of hundreds of planes. After ordering up to 150 Airbus A321neos yesterday, the airline has now announced that it plans to order up to 150 Boeing 737 MAXs.
Given the relationship between Emirates and FlyDubai, I’m curious to see how this all progresses. The next decade is going to be a very interesting one for Dubai aviation.
What do you make of FlyDubai’s lofty growth plans?
If t try were being realistic, savvy, and intelligent, they wouldn't have ordered the Eurotrash and stayed strictly American. Who butters your bread in the Emirates? The US, that's who.
I think the biggest reason Emirates and FlyDubai haven't merged is because the government thinks that Emirates brand reputation would take a hit because of it. The idea is that Emirates is the luxurious long-haul widebody-only airline, operating luxurious and spacious airliners around the world. The idea is that adopting 737s would dilute that image. I agree that it makes sense to operate 737s for EK in terms of serving more markets, but the EK...
I think the biggest reason Emirates and FlyDubai haven't merged is because the government thinks that Emirates brand reputation would take a hit because of it. The idea is that Emirates is the luxurious long-haul widebody-only airline, operating luxurious and spacious airliners around the world. The idea is that adopting 737s would dilute that image. I agree that it makes sense to operate 737s for EK in terms of serving more markets, but the EK leadership/government/rulers of UAE may be worried that would hurt the EK brand. It is similar to how both Cathay Pacific and Singapore Airlines didn't used to operate narrowbodies until recently, because they also made a similar reputation using the same strategy.
Qatar Airways likely would have done the same, except they were historically the underdog, and the only way they could serve certain markets was by operating narrowbodies. I agree that operating narrowbodies makes sense from a business perspective. However, I do believe that some of the regular flying public (specifically those who fly EK occasionally) may be disappointed if they book a ticket on EK only to be on a 737 MAX. It's not exactly a tangible reason, but it is something that exists.
However, Cathay Pacific and Singapore Airlines both recently adopted narrowbodies, so maybe we may see EK eventually follow suit. Though I am skeptical this will happen in the near future, and I'm not going to hold my breath.
Fair enough but they could call it 'Emirates connect' or 'Emirates Express' or something so people know its not the same as mainline. They could even install the exact same EK Y and Y+ seats in 737s so those two classes could have exactly the same onboard experience.
Obviously these planes won't have F so that just leaves J to manage expectations and wit h the 2-3-2 J product on most EK 777s, it wouldn't be hard for Fly Dubai to be comparable.
While I think it's fair to say that some infrequent flyers could be disappointed with a 737 MAX, I would say that encountering 2-3-2 angled flat seats in business is a bigger shock than that. EK is deemed to be a premium/luxurious airline primarily due to the halo effect of their first class product.
This is to say, that adding single-aisle planes that feature lie-flat seats with a higher (and 100 on the new Safran...
While I think it's fair to say that some infrequent flyers could be disappointed with a 737 MAX, I would say that encountering 2-3-2 angled flat seats in business is a bigger shock than that. EK is deemed to be a premium/luxurious airline primarily due to the halo effect of their first class product.
This is to say, that adding single-aisle planes that feature lie-flat seats with a higher (and 100 on the new Safran VUE platform) percentage of direct aisle access could be portrayed as an improvement over their current subpar business on 777s... which for those people that fly more frequently could be a reason to be more likely to seek them out.
There's like 100 smaller cities in Europe, Africa and Asia that could have demand for a B737 but not a B777/A350/A380.
Turkish Airlines do it just fine.
@ chris w -- I agree, and that also gets at why I think a merger is inevitable. It seems strange to have an airline that primarily flies to smaller cities rather than bigger cities, in terms of branding, a streamlined experience, etc. Given the scale of Emirates' network, service to all kinds of cities could be supported.
But the reality is that a vast majority of people have heard of Emirates, but haven't heard...
@ chris w -- I agree, and that also gets at why I think a merger is inevitable. It seems strange to have an airline that primarily flies to smaller cities rather than bigger cities, in terms of branding, a streamlined experience, etc. Given the scale of Emirates' network, service to all kinds of cities could be supported.
But the reality is that a vast majority of people have heard of Emirates, but haven't heard about FlyDubai. And I think many people would be encouraged to book an itinerary if it were on Emirates the whole way, but might be more hesitant if it's a mix of airlines, especially if other options include Etihad, Qatar, Turkish, etc.
I think this makes a lot of sense. First off the deliveries will take place over a decade+, they will retire a lot of aircraft (so it’s not all growth - they like new planes) and the region itself has a lot of potential. I’m guessing it’s also a hedge and worth paying for the slots and then cancelling if not needed. The backlog for aircraft has been so brutal that the calculus might have changed.
the bigger question is how much EK wants FlyDubai encroaching on its markets. The 321NEO is more than capable of flying large portions of EK's network; the MAXs will be for fleet replacement while the NEOs will heavily support network growth through longer flights.