November 13, 2015

Defence acquisitions dominate Dubai Airshow

World’s fastest growing aerospace exhibition

DUBAI - The Dubai Airshow 2015 experienced a significant drop in commercial pas­senger jet orders while military spending was on the rise. The event at the Al Mak­toum International Airport had 1,103 exhibitors and more than 65,000 visitors in what is widely considered the world’s fastest growing aerospace exhibition.
According to figures released by Airbus, the Middle East’s avia­tion market quadrupled in the last decade due to significant invest­ment in infrastructure, a boom in the local aviation industry, includ­ing the rise to prominence of large domestic airliners Etihad and Qatar Airways.
However, analysts anticipated sluggish orders for the biennial show, mainly due to low oil prices and regional unrest. Also, record-breaking orders from Dubai’s air show in 2013, which has resulted in a delivery backlog, the likelihood of repeat orders was minimal. “Buy­ing aeroplanes is not buying gro­ceries in a supermarket,” Qatar Air­ways Chief Executive Officer Akbar al-Baker told the Associated Press.
“We have to order at one time, long-term, and this is exactly what we did two years ago and now we don’t have any more need,” he add­ed.
James Hogan, head of Etihad Air­ways, said the company has placed enough orders to cover its expan­sion plans through 2040.
And Ben Moores, a senior analyst at IHS Aerospace, Defence & Secu­rity, said: “Due to large previous or­ders, the total show order tally this year will be much less than years prior.”
The 2013 edition of the global aviation event included orders on the first day totalling $192.3 billion for commercial jets, with industry heavyweights Boeing and Airbus benefiting from the most orders. The previous one-day orders re­cord was $155 billion set in 2007.
Although this year’s air show was lacklustre in comparison to past ones, Boeing remained the biggest winner in terms of commercial or­ders. The aircraft manufacturer sealed a deal with India’s Jet Air­ways worth $8 billion.
Offsetting the drop in commer­cial aircraft orders in 2015 were military acquisitions, with Gulf Co­operation Council (GCC) members Saudi Arabia and host country the United Arab Emirates at the front of the pack.
“We are seeing a huge military presence at the show this year and we are pleased that it is once again the choice of those looking to make significant and ground-breaking deals,” Michele van Akelijen, the managing director of Dubai Air­show, said in a release.
Among major deals signed was the UAE’s agreement with the Swedish company Saab for $1.27 billion worth of upgraded sur­veillance systems called the Eri­eye, designed to be carried on the Bombardier’s Global 6000 aircraft, which were recently purchased by the UAE.
“I am really happy to announce the first deal that has been signed between the United Arab Emirates Air Force and Saab Industrial this year to buy two new aircraft for the amount of US$1.27 billion,” UAE Major-General Abdullah al-Hashi­mi said in an airshow release.
“By buying two new aircraft and upgrading two existing aircraft, we are very happy to continue our rela­tionship with Saab,” he said.
Lockheed Martin, a US firm, an­nounced a contract worth $262.8 million to maintain Saudi Arabia’s F-15 sniper targeting system.
Despite low oil prices cutting into the purchasing power of Gulf Arab states, neither Saudi Arabia nor the UAE plans on scaling back de­fence spending. Both countries are part of the Arab coalition at war in Yemen with the Iran-allied Houthi rebels. They are also participating in the US-led coalition bombing of the Islamic State (ISIS) in Syria.
Other huge deals at the show in­clude Emirates’ $16 billion main­tenance contract with GE Aviation for its 150 Boeing 777s. The contract covers “the maintenance, repair and overhaul (MRO) of the GE9X engines that will power the airline’s fleet… over a period of 12 years,” the carrier said in a statement, add­ing that it was Emirates’ largest contract of its kind.
Vietnamese carrier Vietjet signed a deal with Airbus worth $3.6 billion for nine A321ceo and 21 A321neo aircraft, according to a statement issued by the airline at the signing ceremony.
A conference on airport security, which tackled wide-ranging issues, from standardisation requirements to challenges in cargo and logistics and cyber-terrorism was also part of the air show.

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