Spending bonanza at Dubai Airshow

Billions of dollars in orders are expected to be unveiled by Middle East airlines at the Dubai Airshow which starts today.

Gulf carriers such as Etihad Airways, Saudi Arabian Airlines and Gulf Air are among customers waiting to receive the Dreamliner. Jeff Topping / The National
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Orders worth billions of dollars are expected to be unveiled by Middle East airlines at the Dubai Airshow, which starts today, as the region's aviation giants press ahead with expansion plans despite concerns of a slowdown in global traffic.

Competition between industry manufacturers to seal deals is likely to be intense as activity remains more muted in North America and Europe.

"Certainly there will be some good orders announced from the leading Middle Eastern carriers," said Ken Herbert, the senior vice president of research at Wedbush Securities in the US.

"I do not expect to hear much from European and North American carriers so the show will be carried by Middle East as well as Asian airlines."

Both Emirates Airline and Qatar Airways have shopping lists for long-range aircraft, setting the scene for a flurry of deals over the five days.

Already one of the globe's fastest-growing carriers, Emirates is on course to become the largest long-haul airline by 2015.

Qatar Airways, the region's second-biggest airline, plans to add to its more than US$40 billion (Dh147bn) of existing aircraft orders at the Dubai Airshow, the carrier's chief executive Akbar Al Baker said last month.

More than 1,000 exhibitors and nearly 55,000 trade visitors will make the show almost 4 per cent bigger than the 2009 event.

Although historically behind the air shows of Paris and Farnborough in the UK in the international pecking order, industry sources say this year's Dubai event has taken on added significance because of the euro-zone sovereign debt crisis clouding the outlook in European markets.

The International Air Transport Association last month warned of the risk of weakening demand for air passenger and freight traffic in the months ahead as business and consumer confidence slides.

Boeing has flown out its 787 Dreamliner, the fuel-efficient aircraft that it handed over to its first customer in September, after about three years of delays to its original delivery timetable.

Qatar Airways, Etihad Airways, Saudi Arabian Airlines, Gulf Air and Royal Jordanian are among regional customers waiting to receive the Dreamliner.

As a sign of the shift in the global power to emerging markets such as the Middle East, only half of Boeing's sales of aircraft are delivered to Europe and North America today. That compares with 72 per cent a decade ago.

"In this part of the world we have over 130 orders," said Jim Albaugh, the chief executive of Boeing Commercial Airplanes. "We think the big airplanes with the big payloads we will sell a lot of in this part of the world."

Airbus, Boeing's European competitor, will be facing pressure to offer reassurances to Middle East customers affected by delivery delays to its A350 passenger jet.

Defence spending will also be dominated by the region's governments as they seek to upgrade their military hardware.

The UAE and France have been locked in discussions about the purchase of 60 Rafale jets, estimated at $10bn.

Major General Ibrahim Naser Al Alawi, the Deputy Commander, UAE Air Force and Air Defence, said yesterday the UAE would announce a deal during the show but declined to say whether it would be related to the Rafale jets.

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