Middle East Set To Rule The World

Hats off to the ruler of Dubai! It has been the sole vision and determination of the Vice President and the Prime Minister of the United Arab Emirates (UAE) and the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum which has transformed the tiny fishing village into an economic powerhouse in the region. With not much oil resources, the emirate of Dubai has invested heavily into aviation, real estate and tourism and the interplay between these three sectors has been crafted excellently by the Emiratis. And when they make mega announcements, put up mega structures, have mega plans, it does not surprise anyone.

So when Emirates Airline, the flagship carrier of Dubai, made a record-breaking announcement of 200 aircraft deal (150 Boeing 777X and 50 Airbus A380) at a combined value of $99 billion in list prices at the recently concluded Dubai Airshow, it certainly did not surprise anyone. Emirates said it is the “largest ever aircraft order in civil aviation and also its largest order announced at any event till date”. The agreement was signed at the Dubai Airshow by Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group, with Jim McNerney, Boeing Chairman, President and CEO, and Fabrice Brégier, Airbus’ President and CEO.

Dubai – ‘The International Aviation Hub’

With a surging Emirates and the newly opened Dubai World Central’s Al Maktoum International Airport (besides the Dubai International Airport), Dubai will become ‘the international aviation hub’ on the East-West axis. While this ambitious project is rolling along, there is keen competition from within the region in the aviation sector. Etihad Airways and Qatar Airways have their own global and mega strategies lined up. The race among these three giants of the Middle East is hotting up the desert region in many sectors, notably aviation.

This comes out loud and clear at the Dubai Airshow which itself is occupying centre-stage, alongside Farnborough and Paris air shows. The air show was held for the first time at the city’s new $32 million Al Maktoum International Airport which is expected to become the world’s largest airport on its completion in 2027.

With its dominating presence, the Dubai Airshow has become a ‘must attend’ for all the ‘movers and shakers’ of the aviation industry and this year the show attracted over 1,000 exhibitors and had gone past 60,000 trade visitors (in 2011 the numbers were 56,548, an increase of seven per cent from the 2009 edition). Within three hours of the show’s opening, the aircraft order tally had touched $200 billion—surpassing its previous record of $155 billion record set in 2007—with deals from Etihad Airways, Emirates Airline, flydubai and Qatar Airways.

Etihad acquires aircraft and airlines

The Abu Dhabi-based Etihad Airways has taken on the route of organic and inorganic expansion, both of which were accentuated at the show. Etihad ordered 56 new Boeing widebody aircraft, with options and purchase rights for a further 26. The deal included 25 next-generation Boeing 777X aircraft, 17 of which are 777-9X and eight 777-8X aircraft. It also ordered a further 30 Boeing 787-10 Dreamliners, making it the biggest customer for the American jet, as well as ordering one Boeing 777-200 freighter.

Etihad placed orders with Airbus too for 87 aircraft—50 Airbus A350 XWB and 36 Airbus A320neo family aircraft, in addition to one Airbus A330-200F freighter—plus options for a further 30 freighters, to support the global expansion of its operations. The President and Chief Executive of Etihad, James Hogan, said: “We have announced 199 aircraft, 294 engines....positioning Etihad Ariways for the next decade of growth.” The total value of the combined deals is more than $67 billion and deliveries would start in 2018. The new aircraft will be powered by 127 GE Aviation, 115 Rolls-Royce and 52 CFM engines.

Etihad’s aggressive buying falls into its 2020 plan to have over 160 aircraft and nine fleet types that include 10 Airbus A380s and 41 Boeing 787 Dreamliners. The carrier aims to fly 25 million passengers per year and reach 120 passenger and cargo destinations, 90 per cent of which will be daily. The impressive growth of Etihad has been charted both organically and inorganically. It has equity stake in seven airlines. The carrier owns stakes in Air Seychelles, Air Berlin, Virgin Australia, Air Serbia and Ireland’s Aer Lingus. It is also expected to close a deal for a 24 per cent stake in India’s Jet Airways before the end of the year.

‘Fly Emirates’ is contagious

From 1985 when it was founded, Emirates has captured the imagination of the world with its ambitious plans, savvy global marketing and promotions. We see the ‘Fly Emirates’ insignia on the T-shirts of football, cricket players and a host of others, striding globally. Emirates’ is making its presence everywhere and it is becoming a popular choice of global travellers. In keeping sync with the growing passenger capacities, Emirates has set goals as to become the top airline in the world. To become one, it has to have a huge fleet.

It continues ordering planes in hundreds. At the Dubai Airshow, Emirates ordered $99 billion worth of aircraft—the 777X from Boeing and the A380 superjumbo from its European rival Airbus. While its sister airline Flydubai weighed in with an $11.4 billion order for 111 Boeing 737s and 738s.

Emirates’ Boeing 777X order is the single largest aircraft order by value in the history of the US commercial aviation, and the additional A380 order cements Emirates, already the largest operator of this aircraft type, as the principal customer for the A380 worldwide. These latest orders bring Emirates’ total firm order book to 385 aircraft (excluding options or purchase rights), comprising 214 Boeing 777s, 101 Airbus A380s, and 70 A350s, at a total estimated value of $166 billion.

“Air transport is a key enabler of world trade, and we see that demand for aviation services will continue to grow globally. What we’re announcing today is a continuation of our commitment andvision to connect the world through our efficient hub in the Middle East. Emirates’ aircraft orders today, with deliveries of the 777X scheduled to start in 2020, will take us to 2025 and beyond – replacing aircraft due for retirement and providing the foundation for future growth,” said Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive of Emirates Airline and Group.

“The announcement today includes the purchase of 300 GE9X engines from General Electric, to power the 150 Boeing 777X aircraft ordered. Taking into account the US Government jobs multiplier (every $1 billion in the US aerospace exports supports 5,747 American jobs), today’s historic order will protect and support over 4,36,000 jobs in the US aerospace manufacturing – not only at Boeing and GE facilities, but with hundreds of other suppliers,” said Sheikh Ahmed.

Largest fleet of A380s with Emirates

Emirates currently operate the world’s largest fleet of A380s with 39 in service. Its order for 50 additional A380 aircraft brings Emirates’ total A380 order book to 101 aircraft, worth $45 billion. A combination of two- and three-class cabin configuration, the first 25 of these latest A380 aircraft orders are scheduled to be delivered before the first quarter of 2018.

“The A380 continues to be the flagship of our fleet, and after five years in operation, it remains highly popular with our passengers,” said Tim Clark, President of Emirates Airline. “It is still one of the most efficient aircraft to operate today in terms of fuel burn and emissions per passenger, and it gives us the flexibility in some cases to meet passenger demand in slot-constrained markets. This latest order will help us meet both fleet expansion and fleet replacement needs.”

Qatar Airways continues buying spree

Qatar Airways formally announced its signature of a letter of intent to order 50 of the Boeing 777-9X variant. Until today, the airline had no orders for the 777X to join its fleet. Currently Qatar Airways fleet is a mixture of various aircraft types, including 51 Boeing 777s—both extended range, long-range and freighters (37 are currently in service with the remaining pending delivery).

Qatar Airways Chief Executive Officer Akbar Al Baker said: “Today, I represent Qatar Airways and its Board Members in signing a ‘letter of intent’ for the purchase of 50 Boeing 777-9X aircraft, valued at $19 billion at list prices. For Qatar Airways, the Boeing 777 is our flagship aircraft. It has been the backbone of the fleet. Operational on many of the routes Qatar Airways flies to, it is well admired by our crew and passengers alike; it is simply a fantastic aeroplane.” Boeing Chairman, President and CEO Jim McNerney said: “Boeing is very proud to have Qatar Airways amongst the launch customers for the new 777X programme. Qatar Airways has enjoyed remarkable worldwide growth in recent years and we very much look forward to continuing to support the airline on its path to further success in the future.”

Qatar Airways also placed a firm order for five new Airbus A330-200 Freighter aircraft. These new aircraft will complement the airline’s rapidly growing network, which includes more than 40 routes that have dedicated freighter services. Included in the order are eight additional A330-200F options, which would make the deal potentially worth over $2.8 billion at list prices for a total of 13 aircraft.

Boeing basks in Middle East sun

With the Middle Eastern countries showing tremendous appetite for aerospace and defence, the Boeing Company is focusing on this market. Boeing showcased a range of products and services at a show including the UAE Armed Forces Land Force AH-64D Apache, an AH-6i light attack/reconnaissance helicopter, a Qatar Airways and Royal Brunei Airlines’ 787 Dreamliner and a Flydubai 737-800 featuring the Boeing Sky Interior and business class configuration.

“Our presence in the Middle East goes back decades,” said Jeffrey Johnson, President, Boeing Middle East. “We have earned the trust of our partners and customers here through meaningful collaboration, contribution to the community and by providing the right products and services at the right time. We remain committed to further expanding our presence and strengthening partnerships with governments, enterprise and customers to support the development and growth of regional aerospace infrastructure and capabilities.”

So does Airbus

Three orders from Middle East airlines involving the full range of jetliner families in Airbus’ current and future production portfolios provided a major kickoff during the Dubai Airshow and marked major new votes of confidence for the A380, A350 XWB, A330 and A320 product lines. Airbus’ commitment to cooperating with developing aerospace markets around the world was highlighted as the Middle East industry is playing a growing role in the company’s jetliners.

This includes partnerships with two United Arab Emiratesbased companies: Strata, a Mubadala company; and Tawazun Precision Industries (TPI), a Tawazun subsidiary. Strata is supplying components for Airbus’ A330 widebody aircraft and its 21st century flagship A380 jetliner, while TPI is supplying parts for the A320 and A330.

Mubadala deal with Boeing, Airbus

Abu Dhabi-based Mubadala Aerospace has cemented its position in the global aerospace manufacturing industry with deals worth $5 billion to make parts for Airbus and Boeing. Boeing will help Mubadala develop a facility to make high-tech composite materials favoured in the aviation industry because of their light weight and fuel efficiency. Airbus has promised to buy the parts from Strata too. In addition, Mubadala will supply further composite and metallic aerostructure components to Airbus.

Bombardier picks up orders

Canadian manufacturer Bombardier gained some traction winning orders and commitments for 27 of its Q400 turboprops and CSeries mainliner jets. Among the biggest announcements was a purchase agreement from Iraqi Airways to acquire five CS300s, with options for 11 additional aircraft. The order, along with the options, would be valued at $1.26 billion as a firm order.

Operators also showed interest in the Q400 NextGen aircraft, with low-cost Thai carrier Nok Air agreeing to a firm order for two Q400s and options and purchase rights for six others. The firm order is worth $63 million, and could increase to $258 million if all options are confirmed. “The extra capacity seating option will give the Q400 NextGen aircraft an advantage of up to seven per cent fuel burn per seat and an overall operating seat cost advantage of up to 17 per cent compared to its closest turboprop competitor,” said Torbjorn Karlsson, Vice President of Sales for Bombardier’s Asia-Pacific division.

Middle Eastern aircraft leasing company Palma Holding also signed an agreement to purchase four Q400s, along with four options, a $282 million order if all options are confirmed. Abu Dhabi-based transport operator Abu Dhabi Aviation and Ivory Coast national carrier Air Côte d’Ivoire also signed agreements for two Q400s each.

ATR ’s first foray in Saudi Arabia

ATR has made its debut in the region with Saudi Arabia’s Alpha Star Aviation Services becoming the first operator of ATR 72-600s. ATR, the world’s leading regional turboprop aircraft manufacturer, displayed its new generation ATR 72-600 in the livery of Indonesia’s flag carrier Garuda. ATR and GE Capital Aviation Services also signed an agreement for the acquisition of 10 ATR 72-600s for a total value of $241 million. The agreement signed by Filippo Bagnator, CEO of ATR, includes an order for five carriers and an option for another five. The Saudi orders will be delivered in 2014 while delivery of Gecas’ orders will begin in 2015.

Engine of growth

GE Aviation and joint ventures landed a record level of business orders totalling $40 billion. The deals reached in Dubai for engine and service orders are the most ever for a single trade show for GE Aviation.

Among the orders placed at the Dubai International Airshow was GE Aviation’s single largest commercial jet engine award from an airline. Emirates airlines reached an $11 billion commitment to buy 150 Boeing 777X aircraft, containing 300 GE9X engines. The 777X twin-engine aircraft and the GE9X engines are under development by Boeing and GE Aviation respectively, and are expected to enter service near the end of this decade.

Also included in the $40 billion log of orders for GE is $13 billion in orders for GE Aviation venture CFM International. More than 450 LEAP orders were placed at the show, bringing total orders and commitments to over 5,800 engines ahead of LEAP’s 2016 debut.

Rolls-Royce rolls on

Engine maker Rolls-Royce Holdings Plc said it has won a $5 billion order from Etihad Airways to provide engines and long-term support for 50 Airbus A350 XWB aircraft and a $300 million order to provide engines and support for five Airbus A330s bought by Qatar Airways.

Business Jets too benefit

While the commercial aviation sector is predominant at the show, there was some traction too for business jets. About one-third of the aircraft on display was business jets. The biggies such as Boeing and Airbus had their business jets too, while other players such as Beechcraft, Bell Helicopter, Bombardier, Cessna, Dassault, Embraer, Gulfstream, Jetcraft, Nextant made their presence felt.

Embraer bags orders

Embraer Executive Jets announced purchase agreement with Arab Wings for Lineage 1000. The aircraft will join a super midsize Legacy 600 and large Legacy 650 already on Arab Wings’ AOC, operating out of its Jordan base. Delivery of the aircraft is scheduled for the first semester of 2014. “We are honoured by the confidence Arab Wings has shown in Embraer by selecting the Lineage 1000 to expand its business aircraft fleet in the ultra-large category,” said Colin Steven, Vice President EMEA, Embraer Executive Jets.

Skyview, another first

The organisers of the show are keen on dazzling everyone. It launched the Skyview, which is designed for the public to enjoy the flying displays. It proved a huge success, drawing thousands of people to its grandstand, located right next to the runway. Seated in Skyview, crowds got direct views of the thrilling action of the Al Fursan, the UAE aerobatic team, the legendary Red Arrows, and astonishing displays by some of the world’s best pilots manning a list of impressive aircraft that the Dubai Airshow has become renowned for staging. Boeing’s F/A 18 Super Hornet, Eurofighter Typhoon and new to the Gulf region, the Airbus’s A400M, were among those presented.