Dubai's LCAL Slashes Dreamliner Order

February 6, 2009

Dubai-based aircraft leasing firm LCAL has slashed its order for Boeing 787 Dreamliners to five planes from 21 due to the global economic crisis, Boeing's regional spokesman said on Thursday.

The global downturn which has sent much of the industrialised world into recession has hurt airlines as fewer people travel, forcing carriers to review capital spending and abandon less-profitable routes.

"LCAL and Boeing have agreed to reduce the number of LCAL orders," said Fakher Daghestani, Boeing's Middle East communications director. LCAL specifically focuses on acquiring and leasing the 787, according to its web site.

"LCAL is preparing for tough challenges caused by the global recession," Daghestani added, without giving details on when the remaining five planes would be delivered or the value of the deal.

Daghestani declined to say if other clients in the Middle East might also cancel orders.

Gulf Arab carriers, including Emirates had placed billion-dollar orders for planes from Boeing and Airbus, banking on regional economic growth to boost traffic through the hub linking East Asia, Europe and Africa.

Last year, Abu Dhabi's Etihad Airways finalized a USD$10 billion, 51-plane order from Airbus, as well as a 45-plane order from Boeing.

But the global financial crisis has also taken its toll on the Gulf Arab region, where a six-year economic boom came to an end late last year as oil prices collapsed.

Dubai, one of seven emirates in the United Arab Emirates, is facing a severe property price downturn that has led to scores of job losses and tens of billions of dollars of project cancellations.

Qatar Airways, which has about 30 787s on order, said in January it was in talks to revise delivery of the jets and was seeking compensation after the manufacturer's latest delay affected the airline's expansion.

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