Boeing downplays Dubai expectations despite strong Middle East demand

Chris Kjelgaard discusses the upcoming Dubai Airshow and what could lay ahead for Boeing following the downplaying of its show expectations.

As the daily aviation trade newspapers finalise working arrangements and reporter assignments for their initial editions from the Dubai Airshow, which runs from November 8 to November 12, Boeing has provided an early chance for reportage by announcing its Middle East aircraft demand forecast for the next 20 years.

On Wednesday (November 4), Boeing issued a news release saying the company was forecasting demand for 3,180 new aircraft from Middle Eastern carriers over the years from 2015 to 2035. Boeing said some 70 per cent of this demand – for which it provided an estimated total list-price value of $730bn – would be driven by “rapid fleet expansion in the region”.

Extracting its Middle East-region forecast from its latest Current Market Outlook, Boeing said single-aisle jets would command the largest share of new deliveries to Middle Eastern carriers over the next two decades.

Airlines in the region would need approximately 1,410 such aircraft over the next 20 years, according to Boeing, which said the new single-aisle jets would continue to stimulate growth for low-cost carriers and replace older, less-efficient aircraft.

The news release quoted Randy Tinseth, Boeing Commercial Airplanes’ vice president, marketing, as saying, “Traffic growth in the Middle East continues to grow at a healthy rate and is expected to grow 6.2 per cent annually during the next 20 years.”

Tinseth went on: “About 80 per cent of the world's population lives within an eight-hour flight of the Arabian Gulf. This geographic position, coupled with diverse business strategies and investment in infrastructure, is allowing carriers in the Middle East to aggregate traffic at their hubs and offer one-stop service between many city pairs that would not otherwise enjoy such direct itineraries.”

Boeing’s Middle East-region forecast expects twin-aisle aircraft to account for a little under half of the region's new aircraft deliveries over the next 20 years, compared to a 23 per cent share of new deliveries globally.

The company said its strong orders from Middle Eastern carriers for 787s and 777s and its high numbers of deliveries of these models to those carriers demonstrated the region’s strong continuing demand for widebodies.

However, all that said, in the weeks leading up to the Dubai Airshow Boeing has been careful to manage aviation reporters’ expectations of major order announcements from the US manufacturer at the show.

As is the manufacturer’s custom, some weeks ago Boeing invited a few aviation-trade reporters to Seattle for pre-Dubai show briefings. This reporter was not among those who were invited, but knows well some who were given the briefings.

Post-briefing whispers suggest Boeing wanted to downplay the idea it would be announcing lots of big orders from Middle Eastern carriers during the Dubai Airshow, particularly for widebody jets.

The only persistent speculation reaching this reporter in advance of the Dubai Airshow is that Saudi Arabian Airlines may announce a sizeable follow-on order for 787s, to add to the earlier order for eight 787-9s it acquired from the Kuwait-based lessor ALAFCO. The carrier is due to take delivery soon of the first of those eight aircraft.

As if to make its point, Boeing didn’t wait for the Dubai Airshow to begin to announce several significant new orders and planned commitments. On November 5 Boeing announced Korean Air had finalised a previously announced commitment for 30 737 MAX jets (as well as securing options on 20 more) and two more 777-300ERs.

In the weeks leading up to the Dubai show, also, Boeing announced significant new orders from El Al and Norwegian for 787-9s; and issued a statement publicising Taiwan-based EVA Air’s intention to order 24 787-10s and two more 777-300ERs.

Meanwhile, Boeing’s rival Airbus has kept relatively quiet about new orders in the weeks leading up to the Dubai Airshow, suggesting it may possibly have kept one or two big orders from Middle Eastern carriers up its sleeve to announce at the event.

However, as if in sympathy with Boeing, Airbus didn’t hesitate to announce late in October an order for 100 A320-family jets and 30 A330s from CASC, China’s state aircraft-purchasing organisation. Airbus also didn’t wait for the Dubai show to announce on 30 October that it was raising A320-family production to 60 aircraft a month by 2019, the highest-ever monthly production rate for any commercial jet-aircraft family.

Regional aircraft manufacturer ATR also got in on the Dubai show pre-emption act, announcing on 5 November a follow-on order for 15 ATR 72-600s from Air New Zealand.

So F&E Aerospace, the organiser of the Dubai Airshow, will hope Boeing, Airbus and other commercial-aircraft manufacturers have left enough gas in their metaphorical aircraft-sales tanks to be able to fuel some order announcements at the Middle East’s largest aviation trade event.

TAGS: Airframes
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