Dubai Air Show Hots Up Before Opening

The Middle East market has become strategically important to Airbus and Boeing. Both have big orders yet to be fulfilled and both want to win further business in time for when a wider global recovery starts.

The eleventh Dubai Air Show gets underway this weekend and it will be just as busy as 2007.

One thing is for certain - that we will not see the multi-billion dollar deals that captivated the show the last time around, nor will we see deals on the scale that Etihad Airways placed at the Farnborough Air Show last summer either. If anything, the lacklustre mood of this summers Paris Air Show will likely be the theme for Dubai this year.

Yield attrition, oil price instability, financial difficulties, airplane order deferrals, cancellations and everything in between has dominated headlines this year and will be in the mix for a long while yet as airlines struggle for business and battle to stay alive.

All eyes will be on the incumbent carrier in Dubai, Emirates, who are in the market for Airbus A330s and more Airbus A350s (dating back to a letter of interest from last summer when it took delivery of its first Airbus A380).

A Dubai Air Show with no splash from Emirates is an incomplete show.

With the focus on the Middle East region, military hardware too will be plying its trade.

The C-17 Globemaster has a dark shadow hanging over its future prospects while Boeing aims to secure further international orders to continue its production. The Airbus A400M, still reeling from development pains and costly delays, suffered its first order cancellation from the South African Government  - it will also be looking to show off its progress as EADS aims for its first flight by year end.

Competition between the swathe of low cost carriers will almost certainly be one the biggest, if not the biggest talking points at the show. With double-booked orders for both the A320 and 737, the appeal of Islamic Sharia-compliant financing has certainly assisted many Arab carriers to push forward with their acquisitions and there certainly is a case to be made for further narrowbody orders at the show – whether this includes the Bombardier CSeries is questionable given the poor appeal of its business proposition to date.

As the Middle East populace within the GCC moves away from the traditional big three Arab carriers to snare low fares, key players ranging from Air Arabia, Jazeera Airways, FlyDubai and others are looking at neighbouring regions to further expand their reach.
India, Pakistan, Bangladesh, Iran, Iraq and North Africa should be extremely worried by the expansion of these fledgling, but formidable airlines.

Strategic direction, not orders will be the main theme at the show – already we have seen the ambitious Dubai World Central Al-Maktoum International Airport scale back one of its planned runways down to a total of five and has paced out its fully operational status towards the latter end of the next decade.

Traffic growth for both passenger and freight in the Middle East is still ahead of any other geographic region, the importance of yield and revenues becomes an intrinsic indicator as to whether the regional growth can even serve as a catalyst to a broader market recovery beyond the GCC borders. Emirates had reported a modest profit last week and it will remain as an influential and powerful entity when a recovery commences.

If nothing else, the Dubai Air Show stamps its authority as a leading, influential and important event - one that no longer be seen as playing second-fiddle to anyone else, least of all Farnborough or Paris.

It wants to become a center for aerospace excellence and is certainly making the right strides in achieving that goal.

The region is simply too important to ignore and the OEMs know it.