The Dubai Airshow opened on a reassuring note on Sunday, with Airbus, Rolls-Royce and other aviation companies trumpeting combined orders worth several billion dollars. The announcements set an uplifting tone for a show that takes place amid a severe downturn in demand for the airlines and for the firms that supply them with aircraft and equipment. As stunt planes dived and thundered in an ear-punishing aerial display above the Dubai Airport Expo, the hard business of selling during a recession unfolded in the exhibition halls and corporate chalets below.
Some industry executives fretted that business at the show, which runs for four more days, won’t be nearly as good as it was the last time around in 2007. Middle Eastern airlines went on a buying spree that year, propelling the event to new prominence compared to similar shows held in Paris and at Farnborough in the UK. But other participants at the event were refreshingly optimistic, stressing that the Middle East is the only region, aside from East Asia, that continues to grow with vigor in an otherwise stagnant industry. “This is, for us, a very important market,” said Tomas Samuelsson, President of Saab Technologies. “We didn’t exhibit at (the) Paris air show, but we decided to exhibit here.” Samuelsson, speaking at Saab’s display stand, described the show as “amazing” after the first day, especially considering the international financial crisis.
In one of the day’s biggest announcements, Britain’s Rolls-Royce said it had reached $2 billion worth of deals to sell jet engines that would power new Airbus aircraft for Air China and Ethiopian Airlines. Rolls-Royce valued the Air China order for Trent 700 engines at $1.5 billion at list prices, while it said Ethiopian’s purchase of Trent XWB engines was worth $480 million. Not all the business was this big. Fly Comlux, a charter airline for VIPs, signed an order for a single Challenger 605 business jet from Bombardier Aerospace. Air India and Aerostar Asset Management, a firm based in Sharjah, agreed to team up to provide aircraft repair services in this region. European plane-maker Airbus SAS racked up the biggest deal of the day: An order from Ethiopian Airlines for a dozen fuel-efficient A350 XWB jetliners. The aircraft are worth a catalogue value of $3 billion. Airbus chief salesman John Leahy acknowledged that the airline was paying less than list prices.
Airbus President and Chief Executive Officer Tom Enders told a news conference that he expected the aviation industry to be “quite challenging” for the next two years. But he stressed that aviation is still a growth industry. “There’s no question we’ll get through this,” he said.
One difference between this show and its predecessor could be that military deals end up trumping civilian ones. “Defence is counter-cyclical to economic cycles,” said Kevin Massengill, a regional executive for US aerospace giant Raytheon. “People need to be safe in their homes,” he said, standing near a Raytheon laser-guided missile. Raytheon has seen the Dubai Airshow grow each time it is held. “The show has taken on a life of its own,” Massengill added, holding up his “dance-card” of meetings he had scheduled for the day. “We have 80 people here compared to 60 last show.” Raytheon signed a $3.3billion deal with the UAE for Patriot missiles last December.
published @ Khaleej Times
