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Dubai 09: DAE plans 787 engine selection next year

Dubai Aerospace Enterprises (DAE) has selected the CFM International CFM56-5B for 20 of the 70 Airbus A320s it ordered last year and plans to make an engine selection for the 15 Boeing 787s it has on order sometime next year.

DAE chief executive Bob Genise says the leasing company has the option of expanding its new $270 million CFM56 contract, forged yesterday at the show, to cover 50 of its A320s.

DAE earlier this week signed a contract with IAE to supply V2500 engines for 20 A320s. Genise says a decision on the last 30 A320s from its 70-aircraft order will probably not be made until at least 2011.

DAE will start taking delivery of A320s in early 2011, but Genise points out that it has only a few delivery slots in 2011 and 2012. "The heaviest deliveries are 2013 and beyond," Genise says.

The engine DAE selects for the additional A320s depends on carrier preferences, he says. "We feel we have total flexibility here. It will be market driven," Genise adds.

While DAE plans to wait a couple of years before signing additional narrowbody engine contracts, Genise reveals that DAE will start discussions with engine suppliers for its 787s next year and a contract should be forged by the end of 2010.

DAE signed a letter of intent for 15 787s at the 2007 Dubai air show. Genise says Boeing has not provided any recent guidance on when these aircraft will be delivered, but points out that the Dubai-based lessor is fairly far back in a long queue.

Genise says DAE is not looking to change any of its delivery 787 positions even as potential opportunities to move up in the queue arise as other customers defer their deliveries. "We're comfortable where we are," he says.

GE Aviation chief executive David Joyce says GE plans to "soon" start talking to DAE about potentially supplying for the 787s. He says that persuading DAE to select the CFM56 for an additional 30 A320s is also "our goal". DAE earlier contracted GE to supply GE90 engines for 10 Boeing 777s and CFM56 engines for 70 Boeing 737s.

DAE's leasing arm, which was established in early 2008, has a portfolio of 37 aircraft that Genise says will grow to 40 aircraft next year and 46 aircraft in 2011. Genise says DAE's first ordered aircraft will be delivered in the third quarter of next year. He says the aircraft, a Boeing 737-800, "is in the process of being placed".

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