Etihad Airways is close to placing an order that could kick off a $50 billion jet-buying spree from the Gulf as the region's carriers flex their muscles in an industry hit by weak margins and high fuel prices.
Taking advantage of deep pockets and a geographically strategic position between East and West, Gulf airlines are expanding rapidly and diverting long-haul traffic from airlines in Europe, the United States and parts of Asia.
Abu Dhabi-based airline Etihad is expected to buy dozens of Boeing Co jets, including the revamped 777X mini-jumbo and a repeat order for its 787 Dreamliner, sources familiar with the matter said on Monday.
The deal could be worth $18 billion at list prices and comes as Etihad prepares to celebrate the 10th anniversary of its maiden flight on Nov. 12, highlighting the Middle East's emergence as a fast-growing global travel hub.
If confirmed, Etihad's order could pre-empt a widely expected blockbuster deal for 100 or more 777X jets from rival Emirates Airline, which has said it may announce a large order when it hosts the Dubai Airshow next month.
The deals are still under negotiation and could change in size and timing, said the sources, who spoke on condition of anonymity because they are not authorized to speak publicly. Boeing's European rival, Airbus, is also competing for the business.
Airbus has punctured Boeing's traditional dominance of the market for big twin-engine jets with its new A350-1000 and scored a historic breakthrough in Japan this month.
Sources familiar with the matter said that Etihad is looking to buy 25 to 30 of the revamped 777X. And in a vote of confidence for Boeing's Dreamliner, which has suffered a series of technical problems, Etihad is also considering increasing its order for the lightweight 787 Dreamliner by up to 30 aircraft, the sources said.
Etihad, which has 41 Dreamliners on order, declined comment.
Boeing said interest was "high" for the revamped 406-seat 777X but declined to comment on negotiations and has yet to make a formal decision on whether it will build the new aircraft.
Dubai's home carrier, Emirates, has said it is considering what many in the industry expect to be a huge order for Boeing 777X jets at the Dubai Airshow to be held Nov. 17-21.
State-backed Gulf airlines are famous for making a splash with big orders, often at the Dubai Airshow. In 2011, Emirates placed an $18 billion order at the biannual show, the largest single order in Boeing's history.
Qatar Airways, another big Boeing customer with an order of 30 Dreamliners, has expressed interest in the 777X but is viewed as the most cautious of the Gulf's big three.
Budget carrier flydubai, which is fast expanding its routes, also is expected to place a $5 billion order for 50 narrowbody jets at the Dubai show and is looking both at Boeing's 737 MAX and the Airbus A320neo.
Saudi Arabian Airways and Kuwait Airways, which put on hold plans to buy 25 new aircraft from Airbus in September, will also look to finalize a deal in Dubai next month.