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?
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?
