The fact that Emirates, Etihad and Qatar Airlines bought more than $150 billion worth of commercial planes on the first day of the Dubai Airshow has surprised no one, but at the same time worried just about everyone in the airline industry — well, everyone who’s not working for the Gulf airlines. The sheer number of aircraft being purchased at this year’s show is outstanding, amazing and a little bit disconcerting.
The headline deal is Emirate’s eye-popping, jaw-dropping deals for 150 Boeing 777X airliners and 50 Airbus A380s, which comes at a time when other airlines are shunning the superjumbo…With this order Emirates is the A380 fleet, owning more than 50 per cent of all orders of the airliner.
Then there’s the sheer number of Boeing 777X planes being ordered. Of the 259 planes announced at the Dubai launch of Boeing’s revamped long haul aircraft, Emirates, Etihad & Qatar bought 225 of them! Poor Germany’s Lufthansa snapped up 34 to be a launch customer, but no one is in any doubt: it will be the “Gulf Three” who will be back in the years ahead to take more by the dozen.
It sends a very strong message. The Gulf Three’s position as global carriers is established and will only grow stronger. Emirates are already the largest airline in the world, after the U.S. carriers, as defined by Revenue Passenger Kilometers (the number of paying passengers multiplied by the number of kilometers flown.)… So why is this worrying? Capacity! All these big planes have to be filled and there is a saying in the industry — old planes never die, they just go into someone else’s fleet…
Capacity is the biggest killer of the industry in a downturn…For the moment, the industry is enjoying growth of around 5 per cent a year — and with new markets emerging, the strong growth in aviation is continuing in front of our eyes. The worry is what happens when that slows and who gets hurt. I guarantee you it won’t be the Gulf Three…Most important of all, the Gulf Three have their own individual strategies for growth. It’s everyone else that’s worried, and they should be.
Dubai Airshow 2013: Day 3
Orders Exceed $200 Billion
As the Dubai Airshow 2013 entered its third day, its record-breaking order book broke through the $200 billion ceiling raising the event’s profile as a world central business player. Deals for Bombardier aircraft took the order tally to new airshow heights with Iraqi Airways signing a letter of intent for five CS300 mainline jetliners, worth approximately $387 million, increasing to $1.26 billion if 11 options converted into firm orders. Minutes later low-cost Thai carrier, Nok Air, placed a firm order for two Bombardier Q400 NextGen aircraft, as well as purchase rights on four more. The order is valued at approximately $63 million and could increase to $258 million if Nok Air exercises its options and purchase rights.
Day three also saw Bell Helicopter announce that by year end, it will make the global debut delivery of its first Bell 412EPI to Abu Dhabi Aviation, where it will be used for offshore oilfield support. Saudi Arabia’s Alpha Star Support Services signed a $13.3 million contract to supply ground support equipment to fellow Saudi Arabian concern TLD. The contract includes two tractors, belt and cargo loaders, air conditioning and ground power units, jet starters and passenger steps.
– Gulf Business