UAE May Take Out Aggravation On US Plane Orders
We don't want you to
run our ports... but please still buy our aircraft. That's the
mixed message the government of the United Arab Emirates is
receiving, in the wake of the US ports debacle... and it may wind
up costing Boeing some big bucks.
The Snohomish County Daily Herald reports the bungled deal has
put a strain on the final stages of Boeing's efforts to sell
approximately 50 of its upcoming 787 Dreamliners to Emirates, the
Middle Eastern airline owned by the government of the United Arab
Emirates.
The UAE government also owns DP World, the Dubai-based company
that was originally planning to operate six US ports -- until
Congress protested so vehemently, citing national security
concerns, that the company pulled out of the deal despite having
the support of the Bush administration.
"Listening to the nonsense being spouted in Congress, you'd
expect the worst," said Teal Group analyst Richard Aboulafia. "They
did reach a new low here," he added, saying US hostility over the
ports deal amounted to "xenophobic grandstanding."
Aboulafia adds that the UAE may chose to take out its
frustration over the ports deal on the American aerospace
manufacturer. Boeing and its European archrival, Airbus, are
competing for an approximately 50-plane deal with Emirates, with
either the 787 or A350 (below) expected to get the nod.
Possible anti-American backlash could throw those orders to the
Airbus column, which would mark the first A350 order from the
rapidly-expanding Emirates. The airline is already a launch
customer for the A380 -- and if Emirates choses the A350 over the
787, it could create a halo effect with other airlines still
mulling over whether to order from Airbus.
The airline is already a big Boeing client, too -- with 46 777
orders worth about $7 billion after discounts. Emirates has also
pushed Boeing to produce the larger 787-10 variant of the
Dreamliner. What impact the port decision may have on that
discussion has yet to be determined.
Emirates is expected to decide within the next three months on
which next-generation jet it will choose. Before any deal can
be finalized, however, it has to receive the blessing of the ruling
families of the UAE -- who are reportedly "furious" with Congress
over the ports deal.
That doesn't necessarily mean Boeing won't ultimately get the
nod from the airline, though.
"Obviously Boeing is
concerned, but they can be relaxed because the government of Dubai
does not have a record of being vindictive," Emirates president Tim
Clark told Bloomberg last week. "If I go to the sheiks and say I
want to buy Boeing, they would never say, 'No, you can't buy
American because of this.'"
The "ports issue has given the wrong impression of Dubai in
America, as if it's the headquarters for al-Qaeda or something,"
Emirates spokesman Mike Simon added. "But that's totally not true.
It's an oasis in the Middle East. We've got churches there and
everything."