Boeing confident on outlook for fuel-efficient jets despite oil price slide

Fuel savings is one of Boeing 787’s major selling points, as the plane uses 20 per cent to 30 per cent less fuel than other aircraft of a similar size.

Above, an Ethiopian Airlines Boeing 787 Dreamliner gets ready to taxi for take off in Sydney. James Morgan / Boeing Australia via Getty Images
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Despite the recent plunge in oil prices, Boeing expects demand for its more fuel-efficient 787 jets staying intact in the Middle East.

Fuel savings is one of the model’s major selling points, as the plane uses 20 per cent to 30 per cent less fuel than other aircraft of a similar size.

“The one thing that most people realise is that one day oil is going to sell back at $70 to $80 per barrel,” said Jeff Johnson, Boeing’s Middle East president. Airlines buy jets to use for as many as 30 years, making a short-term drop in oil prices a less significant factor, he added. Brent crude has dropped by nearly 60 per cent from a summer peak, hovering near $50 a barrel on Friday.

The market has been pinched by lagging demand caused by slow growth in the global economy and higher supply.

“Fuel efficiency is still going to be a big positive – especially in this market [the Middle East], where about 70 per cent of the market is growth. They want to buy the latest technology,” said Mr Johnson.

Fuel constitutes a big chunk of an airline’s costs. The International Air and Travel Association (Iata) says that, on average, fuel contributes to 30 per cent of an airline’s expense.

“The 20 per cent efficiency is still positive for the airline. I think fuel efficiency still helps them make extra profit,” said Mr Johnson.

Boeing expects emerging markets to lead its growth through 2033, when the plane maker forecasts that about 3,360 of its jets will be operated in the Middle East.

Mr Johnson added that the market for large widebody aircraft, such as the Airbus A380, is fairly small, as people prefer to go "point to point directly".

“We still believe that point-to-point traffic is what people want to do. The A380 does the large hubs, but I think in general there is demand for these extra routes to smaller city pairs,” said Mr Johnson. “The 787 is a long -haul airplane in a smaller body.”

The 787 is currently being operated by Etihad Airways, Qatar Airways and Royal Jordanian in the region.

selgazzar@thenational.ae