x Abu Dhabi, UAEThursday 27 July 2017

Boeing strike hits Gulf carriers

Aircraft under construction for Emirates and Qatar Airlines sit on Boeing production lines.

Knock-on effect: the strike at Boeing is negatively impacting Gulf carriers and they have been forced to curtail expansion plans.
Knock-on effect: the strike at Boeing is negatively impacting Gulf carriers and they have been forced to curtail expansion plans.

A seven-week-old strike at Boeing is forcing Gulf airlines to slow expansion plans for this winter as deliveries of long-range aircraft from the US plane maker slow to a trickle. Negotiations between the International Association of Machinists & Aerospace Workers (IAM) and Boeing management resumed yesterday after a prolonged break, but the stoppage has started to hit Gulf carriers. Emirates and Qatar Airlines, two of the world's fastest-growing airlines that have placed large orders for Boeing's long-range 777 aircraft, have adjusted their expansion plans. At least five aircraft in various stages of construction destined for the two airlines sit at Boeing factories in Washington State. Together, the two companies have more than 75 of the 777s on order. The Abu Dhabi-based Etihad Airways has ordered another 10 777s, but the delivery dates for those are not until 2011. Qatar Airways had been forced to defer the launch of a non-stop service to Houston until March, a three-month delay, due to unavailability of aircraft, a company spokeswoman said. However, the delivery problems would not have an impact on Qatar Airways' plans to expand to a daily service from Doha to New York on Oct 26, she added. Emirates airline said it would be able to fly only three times a week from Dubai to Los Angeles from Oct 26, and San Francisco from Dec 15, again because of aircraft supply issues. Its West Coast expansion, to San Francisco and Los Angeles, has hit further problems. In July, Emirates pushed back the launch dates for both cities by more than a month because four Boeing 777s suffered production delays due to difficulties at key Boeing suppliers. "We are trying to impress on Boeing that we need our planes and that we need them to sort it out as soon as possible," Tim Clark, the president of Emirates, said earlier this month on the labour strike. "The longer it goes on, the more difficult it is for us." The Boeing 777 has become a favoured aircraft for the Gulf airlines as they work to make the Middle East a new centre for long-haul travel between Asia and the West, ahead of Europe and South East Asia. The twin-engined aircraft from Boeing can fly as far as 14,260km with a full load of passengers and cargo, and is more fuel-efficient than the four-engine equivalent by Airbus, the A340. Jim McNerney, the chairman and chief executive of Boeing, on Wednesday said it had offered unionists an "industry-leading -offer". He said, "I want to be very clear, we worked hard to avoid it, and want to resolve it as soon as possible." The strike has reportedly cost Boeing US$100 million (Dh367m) per day, and added another two months to the delay of its 787 Dreamliner programme, which was already 15 months behind schedule. Despite a commercial aircraft order book worth $276 billion, Boeing's third-quarter results were dragged down significantly by the continuing industrial strife. Revenue dropped 7 per cent while net profits fell by 38 per cent, to $695m. In total, Boeing delivered 35 fewer planes in the quarter due to the strike, as well as to problems with a supplier of aircraft galleys. On Wednesday, Boeing shares dropped by 7.5 per cent, or $3.49, to close at $42.91, on a day when the Dow Jones Industrial Average fell by more than 500 points amid a wave of disappointing earnings announcements. igale@thenational.ae