Defence deals ready for takeoff

Ivan Gale

• Last Updated: November 14. 2009 9:52PM UAE / November 14. 2009 5:52PM GMT

At the last Dubai Airshow in 2007, airlines and business jet owners racked up a record $155bn worth of new aircraft sales. AFP

An increased number of fighter jets on display at Dubai International Airport should keep the crowd happy, despite an expected drop in the number of aircraft orders. All eyes will also be on the UAE Armed Forces for announcements on big defence contracts.

A bigger presence of fighter jets and defence deals by the UAE Armed Forces will add greater interest to the Dubai Airshow, starting today, despite aircraft orders expected to be down.

Billions of dollars of military transport aircraft and fighter jets could be signed at the show, which closes on Thursday, as the Air Force upgrades its capabilities.

After signing letters of intent for several deals at the IDEX defence expo in Abu Dhabi in February, the Government is finishing negotiations and may announce formal contracts this week.

At the last airshow, in November 2007, airlines and business jet owners ordered a record US$155 billion (Dh569.31bn) worth of new aircraft, including one $31bn order from Emirates Airline for up to 131 new Airbus aircraft.

But the economic downturn has curtailed demand for new aircraft worldwide and the region’s big-spending commercial airlines, Qatar Airways, Etihad Airways and Emirates, have largely finished their fleet acquisition plans, with hundreds of planes on order.

“One thing is for certain, that we will not see the multibillion-dollar deals that captivated the show the last time around,” said Saj Ahmad, an analyst at FleetBuzz Editorial.com.

Emirates may be a possible exception, as it is set to retire nearly 60 ageing aircraft over the next few years and may buy more to fill the gap, analysts said.

“Rumours abound that it may firm up a deal for Airbus A330s and more Airbus A350s,” Mr Ahmad said.

A regional defence spending boom has also attracted the world’s top fighter jets, among the 118 aircraft that will be on display.

The French air force is presenting the Dassault Rafale, while the US defence department will introduce for the first time in Dubai the F-22 Raptor from Lockheed Martin.

The UAE will display its F-16 Desert Falcon, while the UK Royal Air Force is flying the Eurofighter Typhoon, making its first appearance to help keep the estimated crowd of 50,000 entertained through the week.

“Anything new at the air show always creates some buzz,” said Alison Weller, the director of the air show organiser F and E Aerospace.

Ms Weller said the theme for Dubai Airshow’s 20th anniversary is: “We are still growing, although not as big as before.”

One of the biggest exhibitors this year will be EADS, the European aerospace and defence giant, and Mubadala Development, the strategic investment arm of the Abu Dhabi Government.

Through its Strata Manufacturing business in Al Ain, which will make high-end aircraft components for Airbus and other builders, Mubadala hopes to put Abu Dhabi on the map as a global aerospace centre.

It is also investing heavily in aviation services such as maintenance, signing joint venture deals recently with Sikorsky, Rolls-Royce and General Electric.

The Emirates military is in the middle of a huge defence spending program that has included new naval corvettes and missile defence systems.

It was the third-largest buyer of military systems between 2004 and last year, behind China and India, says the Stockholm International Peace Research Institute.

Dassault’s Rafale is the sole contender to replace the UAE’s fleet of Mirage 2000 fighter jets, in an estimated 60 fighter sale valued at between €6bn (Dh32.84bn) and €10bn.

Local defence officials have said a deal could be announced at the airshow if the negotiations finish in time.

At the IDEX show this year, the UAE also announced plans for a new fighter jet training programme with aircraft from Italy’s Alenia Aeronautica, and signed letters of intent for 16 military transport aircraft from Boeing and Lockheed Martin, the US aerospace and defence giants, for Dh11bn.

The UAE could put pen to paper with those firms this week, and is considering a number of separate deals.

Alenia and Pilatus of Switzerland are also keen to supply the UAE with intermediate trainers, while Boeing, Northrop Grumman of the US and Saab of Sweden are the final bidders for early-warning radar aircraft planes.

The UAE has been considering since last year a missile defence system built by Lockheed Martin called the Terminal Area High-Altitude Defence, which can shoot down ballistic missiles in the exosphere, the last layer of the atmosphere.

The missile defence shield is thought to be valued at $7bn and is also a contender to be the show’s biggest announcement.

The Dubai Airshow, with about 900 exhibitors, is being held at the Airport Expo exhibition hall next to Terminal 3 at Dubai International Airport.

It was originally planned to be held at the Al Maktoum International Airport in Jebel Ali this year, but project delays meant the new airport would not be ready in time.

Ms Weller said the grounds at Airport Expo had been expanded to handle the increase in visitors and exhibitors this year.

“With the new venue there was a fear of the unknown, so going back to what you know and trust is actually perfectly fine,” she said.

“Had they not been able to increase the venue, there may have been problems, but they did.”


igale@thenational