World's largest airplane order could herald good news for the Gulf

A replacement for the Boeing 737 may happen sooner than suggested at the Paris Air Show last month.

As part of the largest aircraft order in aviation history made by One World Alliance member American Airlines today – totalling some 460 aircraft – the loss-making US airline ordered 200 Boeing aircraft, spilt between current Next Generation 737 models and "Boeing's expected new evolution of the 737NG, with a new engine", which will be the CFM International Leap X.

Equally newsworthy was the American Airlines order for 260 aircraft from European manufacturer Airbus with 130 current generation A320s and the same number of the A320 neos.

The orders will be delivered between 2013 and 2022.

Key to the deals is $13 billion in financing committed by Airbus and Boeing in lease transactions covering the first 230 deliveries.

Analyst Saj Ahmad, commenting on the announcement, said: “

It's a big coup for Airbus on two fronts. Not only will they have sold jets to AA, the interesting point here is that Boeing has decided to follow Airbus' example and re-engine their best selling airplane of all time, the 737. Boeing has said for months it wouldn't rush to a decision but now we know which strategic direction they are heading in, , like Airbus, they too will capture swathes of orders as airlines look to cut fuel bills with more efficient aircraft.”

Turning to the engine maker CFM – a joint venture between GE and French firm Safran – Ahmad described the jv as “the big winner here.” He said “If they can assume a monopoly position on the re-engined 737 as they enjoy already today, then all future orders for the new 737 will see CFM walk away with billions worth of orders for possibly two or more decades.

“Whats interesting now is that the likes of Flydubai, the only real prominent 737 operator in the GCC, can leverage better fuel savings with these new airplanes - it is inevitable that they will procure these airplane sooner rather than later. Once the formal announcement of the re-engined 737 is made, we can expect to see a huge haul of orders in the way Airbus reaped with the A320neo at Le Bourget in June.”

The huge Airbus order could also bring benefits to the Al Ain based Strata – the aero systems manufacturer which is part of Mubadala.

Last month the company began delivery of its first composite parts for the A320 programme.