Dubai firm axes Airbus order

DAE Capital has recently cancelled all its remaining backlog of aircraft orders with Airbus in the latest sign of disruption at the majority state-owned Dubai leasing company. DAE Capital, 23-percent owned by state-linked DIFC Investments, along with Dubai's sovereign wealth arm, Investment Corporation of Dubai, has long been in trouble. DAE Capital, whose Chief Executive stepped down on June 30, has now cancelled orders for 45 aircraft worth USD$5.8 billion. The same company had cancelled Airbus orders worth USD$4.7 billion as a slew of Boeing orders in March. The move will place attention on the fate of its remaining orders with Boeing. DAE has outstanding orders for 56 Boeing aircrafts. The company ordered more than 200 aircraft during an industry boom in 2007 but its ambitions fizzled out during the global financial crisis. "The shareholders in DAE are government entities and each of them own at minor stake, so there is not a single entity that is championing for DAE and this may be a reason why it is marginalized," said Khuram Maqsood, former Director at a Dubai investment Fund. "The cancellations had to do with the liquidity issues DAE is facing, and in general, Dubai is facing. The cancellations are just a symptom of the ground reality." This major step also raises questions over the fate of about $9 billion in unfilled orders by the same leasing company from Boeing.