Dubai Airshow opens as big Gulf airlines slow down purchases

DUBAI, United Arab Emirates (AP) – The Middle East’s biggest aviation event, the Dubai Airshow, opened yesterday without any major deals as flagship Gulf carriers rein back big-ticket purchases.

This year’s lackluster start could be seen as a reflection of the various challenges facing the industry but may also be due to the hundreds of planes already on order by Mideast airlines that have yet to be delivered.

In the only major announcement of the day, Boeing and Biman Bangladesh Airlines signed a deal for two 787-9s aircraft, which list at USD292.5 million a piece. However, buyers often get better deals from manufacturers.

In contrast, there were USD140 billion in new orders announced at the start of the 2013 airshow, but that was an era before global oil prices collapsed, sparking a slowdown in economic growth across the Gulf Arab region — home to the Middle East’s largest carriers.

The region’s biggest airline, Emirates, has a commitment for 70 new Airbus planes worth USD21.4 billion at list prices to be delivered over the next five years. At the last Dubai Airshow in 2017, the airlines announced a purchase of 40 American-made Boeing 787-10 Dreamliners in a deal worth USD15.1 billion.

The airline, which feeds Dubai’s busy international airport, posted significantly lower earnings of USD237 million last year due to spikes in fuel costs, a strengthened US dollar, lower airfreight demand and weakened travel demand.

Meanwhile, Abu Dhabi’s Etihad Airways has lost a total of USD4.75 billion since 2016 as its strategy of aggressively buying stakes in airlines from Europe to Australia to compete against Emirates and fellow rival Qatar Airways exposed the company to major losses. Qatar Airways is also struggling under the weight of a continued blockade by neighbouring Arab states, which have barred the carrier from their airspace and airports.

A Japanese crew fixes the rope around the Kawasaki C-2 transport aircraft during the opening day of Dubai Airshow in Dubai, United Arab Emirates. PHOTO: AP

The biennial airshow, which runs for five days until Thursday, draws major commercial and military firms from around the world, as well as smaller manufacturers competing for business in the Middle East. The United States has the largest foreign country presence with over 100 companies represented.

Officials from the United States (US) Department of Defense and State Department are also at the airshow, meeting with officials from the United Arab Emirates, which is one of the world’s top buyers of American-made weapons and defence equipment.

The Chicago-based Boeing will likely use the airshow to emphasise its dedication to safety after crashes of its 737 Max killed 346 people. The planes have been grounded around the world, impacting customers like flydubai which has more than a dozen of the jets in its fleet and more than 230 on order.

Internal Boeing documents have revealed that before the crashes, company employees had raised concerns about the automated flight-control system that played a part in pushing the planes’ noses down until the jets plummeted, as well as the hectic pace of airplane production at Boeing. The company has settled dozens of lawsuits filed by families of passengers killed in the two crashes, but the terms of the settlements are being kept confidential at Boeing’s insistence. “It’s been a very difficult time for the Max,” said Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes. “I can tell you we’re very sorry for the loss of life on those accidents and we’re very sorry and apologise for the disruption that we have caused our customers.”

He said the company is working hard to make improvements to the aircraft and to make changes to the training of the aircraft to get the airplane certified by the end of the year and to have it flying by early 2020.

“Ultimately, the schedule for all of those activities will be determined by the regulators so were taking their lead,” he said.