The 15th edition of biennial Dubai Airshow, to be held next month, is set to eclipse its previous edition as both Airbus and Boeing are expected to firm up some of the earlier announced deals, but unlikely to match the record 2013 orders, aviation analysts said.

"The 2017 edition of the show certainly has more chance of eclipsing the 2015 show. But then, the 2015 air show was always going to struggle because of the huge 777X launch at the 2013 show - so it stands to reason that this year, we'll see a sharper resurgence of order activity," said Saj Ahmed, chief analyst at London-based StrategicAero Research.

The 2015 edition recorded $37.2 billion order book with 1,103 exhibitors from 61 countries taking part in the air show.

Richard Stolz, head of corporate development, grmc Advisory Services, sees some passenger airlines will place orders but one can expect that the overall order volumes of airlines at Dubai Airshow 2017 will be less than the peak year of 2013.

"In 2013, the key Middle East legacy carriers - Emirates, Etihad and Qatar Airways - placed substantial orders; Emirates then led the order book with 200 planes; so considering those key carriers expecting annual deliveries from past orders and also taking account of the financial difficulties some Middle East carriers went through in the past 12 months, one can assume overall order volumes will be less," Stolz said.

In 2013, Emirates' total order value was $99 billion with 150 Boeing 777 and 50 Airbus 380. In 2013, flydubai ordered 111 aircraft from Boeing with a total order value of $11.4 billion.

"So both airlines still expect annual deliveries from their 2013 orders first which makes it doubtful if new or substantial orders will take place in 2017," he added.

Airbus vs Boeing
Ahmed said it is likely that Airbus may announce firm deals with a number of Iranian airlines that placed expressions of interest at the Paris Air Show in the summer. Indeed, both Airbus and Boeing will likely firm up some of the earlier announced deals with several major Chinese airlines as well as 787s for Egyptair and 787 for Emirates.

"While there will be a number of airlines announcing deals, I don't expect the value or volume to come close to the record-breaking figures seen at the 2013 show. Indeed, many announcements may include jets that are already booked in the backlogs at Airbus and Boeing, but have not been revealed by customers. Certainly, key moves by Emirates and Egyptair are seen as the frontrunners this year," he noted.

Given how Boeing absolutely slaughtered Airbus in its home territory at the Paris Air Show this summer, Ahmed said Airbus will be keen to try and win the Dubai Airshow order intake.

Now, Boeing has amassed almost 64 per cent market share for widebody orders and 62 per cent for narrowbody orders as at September 30, 2017. "So it looks like Boeing is firmly on course to trounce Airbus yet again."



Models in demand
Majority of the orders are expected to come for A320neo, A321neo and A330neo for Airbus 787-9, 787-10, 777-300ER, 777 Freighter, 7373 MAX 8 and 737 MAX 10 for Boeing. Stolz sees updates to the manufacturer's existing versions like Airbus A320 Neo or Boeing 737 Max could see demand among some carries as these new versions are more fuel-efficient.

In the next couple of years, Ahmed said airlines like Emirates and Etihad will turn around their business because of the resurgent demand back to the USA where traffic is often high yielding and bolsters earnings.

With some regional and smaller low-cost carrier struggling to make money given that they are all chasing the same traffic and not opening up new city pairs, the likes of flyadeal, flynas, SalamAir and Jazeera Airways will really struggle. The dominance of flydubai and Air Arabia means that they are far more agile and have such critical mass via organic growth that they can replace and manage capacity far better, he noted.

And with Emirates and flydubai getting together, the synergies they produce will slash costs for them both which again will add to their bottom line, not elaborated.

Stolz believes that strong dollar, regional political stability, internal efficiencies such as cost of operations and maintenance and operational effectiveness will dictate the regional airline's growth. The emergence of low-cost carriers (LCCs) and regional airlines in the Gulf is still going to evolve. Recently, some new LCCs regional carriers such as Salam Air in Oman, Flyadeal in KSA, the revival of Wataniya Airways in Kuwait. These new arrivals will enhance competition among established regional LCCs such as Air Arabia, Flynas or Flydubai, he added.- waheedabbas@khaleejtimes.com




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