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Tuesday, May 28, 2024

Multi – billion $ deals

by Joanna Andrews

© Dubai Airshow, HH Sheikh Mohammed opens the Dubai Air Show 2013

Regional airlines Emirates, Etihad and Qatar took centre stage at the Dubai Air Show in November 2013. Collectively they are known as the Gulf Big Three… the driving force of the world’s aviation industry. Joanna Andrews explains why …

The Dubai Air Show made aviation history – with multi billion dollars worth of deals on the table – mostly coming from Gulf carriers. The 13th edition of the Dubai Air Show took place at its purpose-built home at Dubai World Central, near Al Maktoum International Airport – Dubai’s second and brand new airport. His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai proudly opened the event. The world may have doubted years ago when he famously announced at the Paris Air Show that the global airline industry was about to change. Today, it has probably even surpassed even his own expectations.

Boeing vs Airbus
As is always the case at air shows, competition was high between global rivals Boeing and Airbus, and this year the numbers were staggering. Three of the world’s top airlines come from the Middle East - Emirates, Etihad and Qatar Airlines. They are collectively known as the Gulf Big Three, and they dominated the plane orders. Between them, they ordered more than 320 long-haul aircraft worth hundreds of billions of dollars. Emirates placed jaw-dropping orders of $99 billion on the first day of the show – much to the delight of Boeing and Airbus. Emirates placed an initial order for 150 Boeing B777Xs, which was promptly followed by a $23 billion order for an additional 50 Airbus A380s. On its opening day, the Dubai Air Show took orders of nearly $200 billion dollars – beating previous records.

Emirates has big pockets. Its latest report card speaks for itself, it recently reported sales of $21 billion dollars… that’s twice as profitable as most other airlines. The airline has earned a worldwide reputation helped along by its quality of service, rapid growth and strategic sponsorship deals. It has drawn in the crowds following sponsorship of various football teams like Arsenal, Paris St Germain and AC Milan.

But it wasn’t the only big spender at the Dubai Air Show, its Abu Dhabi neighbour, Etihad Airways, unveiled a deal worth $25.2 billion for 56 new Boeing wide-body aircraft, with options and purchase rights for a further 26. The order includes 25 Boeing 777X aircraft, 30 787-10 Dreamliners and one 777-200 freighter. The announcement makes Etihad Airways the largest airline customer for the Boeing 787 Dreamliner.

 "The response to the 777X has been astounding," Boeing Chairman James McNerney told the media, while James Hogan, President and CEO, Etihad was quoted as saying, "We rarely make announcements at air shows, but when we do the world listens."

The GCC’s third major airline, Qatar Airways, ordered 51 of Boeing’s new 777X jets and also placed a firm order for five new Airbus A330-200 freighter aircraft with options for an additional eight aircraft in a deal valued at $2.8 billion.

It was a record breaking event, with even government backed, low-cost carrier flydubai ordering 100 Boeing 737MAXs and up to 11 Next-Generation Boeing 737-800s, in a deal worth $11.4 billion – marking the largest commitment to order a single-aisle Boeing aircraft in the Middle East.

The struggling European airlines are undoubtedly looking on in envy as the Gulf carriers, courtesy of the backing of their governments, rub their palms with glee

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