Dubai Air Show: Big-ticket orders to break 2015 tally?

The Dubai Air Show has had notoriously bad luck with weather in the past. This year, the cloud of slower global growth is likely to turn eyes away from building capacity towards improving productivity and efficiency.

And analysts expect those to be among the main trends affecting the show this year as the five-day event kicks off on Sunday.

For the 1,200 exhibitors present at the show, that will mean fewer deals than previous years.

Around $37.2 billion (Dh136.5 billion) worth of deals were signed at the biennial show in 2015; nearly one fifth of the more than $200 billion worth of deals signed in the previous version of the show in 2013.

“[I expect to see] fewer deals than previous years, primarily because many orders are already in place, though Airbus will be hoping for a big ticket order for more upgraded A380s by Emirates.

“More modest growth and concern about the political challenges faced by the region and globally [are likely to be the main trends], all of which can impact airlines and demand for aircraft,” said John Strickland, aviation expert and director or air transport consultancy JLS Consulting.

Deals in 2013

The 2013 edition of the Dubai Air Show saw bulks of orders from various airlines, with Emirates, for example, placing its largest ever order at that show for a total of 200 aircraft — a mix of Airbus and Boeing — at a combined value of $99 billion.

Similarly, Etihad Airways announced its largest fleet order of 199 aircraft and 294 engines in a $67-billion deal at the Air Show in 2013. The order included 87 Airbus and 56 Boeing aircraft, with another 56 options and purchase rights.

And some of those aircraft ordered then are yet to be delivered. But that’s not to say that manufacturers in the industry will leave the show empty-handed.

Emirates, which recently received its 100th A380, said earlier this month that it hopes to order more of the Airbus super-jumbo at the air show, Reuters reported.

And as Airbus’ veteran sales chief, John Leahy, prepares to retire, he is expected to make at least one more significant A380 order, likely at the show and from Emirates, a Reuters report said.

Boeing earlier also said it is looking forward to some orders firming up at the air show. The American aircraft manufacturer will be displaying its first 787-10X test aircraft.

Saj Ahmad, chief analyst at StrategicAero Research, said that while he didn’t expect deals this year to eclipse those in 2013, there just may be enough activity to beat the 2015 tally.

Ahmad pointed that the biggest challenge will be excess capacity from airlines.
“The key theme for me this year will be turning capacity into profitability. While Emirates’ first half results have shown a superb turnaround, the reality is that there are still too many fringe players in the GCC …” he said.

Emirates on Thursday reported Dh1.7 billion in net profit, a 111 per cent increase year-on-year as seat load factors improved and the carrier cut capacity on some routes.

Growth areas

Deals aside, this year’s air show will focus on growth areas and new sectors in the aviation industry including unmanned aerial systems, airport solutions, space, and cargo.

Organisers behind the event said last month the show will highlight the future of travel, including space travel and new technology.

Meanwhile, low-cost carrier flydubai will showcase its new 737 MAX aircraft, which will be displayed for the first time in the Middle East and is the first of that model flydubai is receiving.

Emirates will be unveiling its new First Class cabins for the newly configured 777-300ER, while Etihad will be demonstrating a new in-flight connectivity system that will be introduced in partnership with Yahsat and du.

Around 72,500 visitors and 1,200 exhibitors are expected to attend the Dubai Air Show this year. The last edition of the event drew just under 63,000 visitors and 1,003 exhibitors.

Source: Gulf News