Gulf airlines splash out over $150 billion as Boeing launches new jet

DUBAI Sun Nov 17, 2013 5:56pm IST

Boeing Chairman James McNerney (2nd L) shows United Arab Emirates' Prime Minister and Ruler of Dubai Sheikh Mohammed bin Rashid al-Maktoum (2nd R) a model of the new version of its 777 long-haul jet during the Dubai Airshow November 17, 2013. REUTERS/Ahmed Jadallah

Boeing Chairman James McNerney (2nd L) shows United Arab Emirates' Prime Minister and Ruler of Dubai Sheikh Mohammed bin Rashid al-Maktoum (2nd R) a model of the new version of its 777 long-haul jet during the Dubai Airshow November 17, 2013.

Credit: Reuters/Ahmed Jadallah

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DUBAI (Reuters) - Gulf airlines splashed out on well over $100 billion of orders on day one of the Dubai Airshow, underscoring a shift in power in the aviation industry and giving a boost to the formal launch of Boeing's newest jet, as well as to Airbus's A380 superjumbo.

Under hazy skies, sheikhs and ruling family members of Dubai and neighbouring Abu Dhabi toured rows of passenger jets and arms pavilions at the new 645,000 square metre venue, built to showcase the Middle East's largest aviation hub.

Dubai-based Emirates led the buying spree on Sunday with an order for 150 of Boeing's (BA.N) new 777 mini-jumbo, in a deal worth $76 billion at list prices. It also ordered 50 Airbus A380s, the world's biggest passenger plane, worth $23 billion.

With demand from Etihad Airways and Qatar Airways as well, Boeing announced commitments for a total of 259 of the new 777 jet, previously codenamed 777X, worth about $100 billion at list prices - the largest combined order in its history.

"The response to the 777X has been astounding," Boeing Chairman James McNerney said at a packed news conference to officially launch the new plane, in front of Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum.

Gulf airlines are competing with each other for a share of traffic flooding through the region, due to its strategic location between East and West, and with many recession-hit European airlines strapped for cash, their business is becoming increasingly important to Boeing and Airbus EAD.PA.

The revamped 777 marks a new front in the battle between the two aircraft manufacturers that dominate the civil aviation industry. Boeing's new plane is aimed at heading off competition from the largest version of Airbus's A350 in the mini-jumbo market that drives growth and connectivity between continents.

Boeing's top planemaking official pledged not to let a dispute with Seattle assembly workers over where the plane should be built interfere with its launch, which kicked off the November 17-21 Dubai show.

The U.S. group is looking for a home for the new jet after members of the International Association of Machinists rejected a proposed contract that would have seen Boeing commit to keeping the latest member of the 777 series near Seattle in exchange for restructured benefits.

BOOST FOR THE A380

Airbus, which has a record of springing surprises at air shows, is keen to prevent a smooth lift-off for the new 777 and is negotiating deals for all sizes of its jets.

"Airbus is desperate to blunt the impact of the 777X," said a senior industry source, speaking on condition of anonymity.

The event presents a personal challenge for combative Airbus sales chief John Leahy, a New Yorker who is keen to avoid a rare defeat at an air show in his 20th year in the job.

Leahy is under pressure to revive the fortunes of the A380, which until Sunday had found no buyers this year and faces a cut in production unless empty 2015 production slots can be filled.

Emirates, already the biggest customer of the A380, said it was ordering a further 50 of the planes, at the top end of expectations, and bringing its total orders for A380s to 140.

U.S. AIRLINE WARNING

Boeing's new 777 comes in two models including what will be the world's longest-distance passenger jet, a 350-seat model to be known as the 777-8 once the aircraft has been launched.

The larger 777-9 edition, carrying 406 people, will be the main version and be delivered starting 2020.

Together, the modernized planes call for development of carbon-fibre wings that fold at the tips to fit in the same parking spaces and new engines from General Electric (GE.N).

Airbus says Boeing has packed in passengers densely to make the revamped aircraft's economics work against its own all-new 350-seat model, the A350-1000, due to enter service in 2017.

It has launched a campaign for a minimum standard seat width of 18 inches on long trips, aiming to draw attention to what it says will be the 777's narrower seats.

Some airlines have told Airbus that this is their decision and Boeing says many Airbus jets have similar seats.

A group representing U.S. airline pilots, meanwhile, warned that the sale of hundreds of planes to Gulf carriers that compete with U.S. carriers would have "serious consequences for the U.S. economy and U.S. airline workers." This would create stiff competition for the U.S. airline industry.

Highlighting defence deals also at stake at the November 17-21 air show, UK Prime Minister David Cameron toured the complex even before the event had started, telling the heads of British aerospace and defence companies to "get out there and win".

Britain is competing with France for a potential 60-plane fighter jet deal with the United Arab Emirates. (Additional reporting by Andrea Shalal-Esa, Mahmoud Habboush, Mirna Sleiman, Writing by Tim Hepher; Editing by William Maclean and Mark Potter)

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Comments (1)
indianmoney wrote:
The focus of Boeing for its dreamliner jet has been fuel efficiency as well as long range capability.In spite of shortcomings in battery affecting electrical and even groundings this aircraft is still preferred in many countries an is soon going to be the mainstay of Air India on its long range flights.With Boeing and Airbus both having a very high reputation the airplanes are purchased with very little fuss.The Gulf regions being a major International hub and with the added benefit of low ATF prices and now coupled with a highly powerful,long range ,fuel efficient set of aircraft , experienced aircraft maintenance capabilities and excellent hospitality services can give stiff competition to their counterparts in the US and even Europe.

Nov 21, 2013 12:43pm IST  --  Report as abuse
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