Will the Dubai Airshow 2017 yield orders gold or sales drought?

By Shayan Shakeel 1 November 2017

While just as overcast as the edition before, with rain threatening the end the show early, the Dubai Airshow 2015 came with the crucial distinction that there had been no new wide-body announcements in the runup to the event. After racking up record orders of over $200 billion at the event in 2013, Middle East airlines were seen still absorbing fleet and it wasn’t as much of a surprise that the 2015 Airshow didn’t yield similar sales numbers as previous editions.

However, the industry is rife with speculation over what will happen this year.

Emirates has been recording mixed signals with its intent for Airbus A350s or Boeing 787s; while the airline’s tie up with Flydubai has created an unprecedented opportunity for new aircraft, at one point earlier this year president Tim Clark went as far as to say “orders have been put on hold for now.”

How long can orders have been put on hold? Clark made a similar statement before the 2015 Dubai Airshow and no decision was announced then. However, this year at least one analyst, Saj Ahmed says the Dreamliner order is “a done deal.”

Meanwhile, The Dubai-based carrier’s president has also been vocal about there being no possibility for any further A380 orders unless Airbus manages to sign up other buyers for the aircraft.

“I don’t want to be left with a pup. I don’t want to be left with aeroplanes that are headed for obsolescence,” Clark said at the Paris Airshow in June.

Major wide-body announcements are known to happen a few times in a decade, so its likely the Airshow this year might once again only yielf a handful of deals. Crucially, Airbus’ A330neo this time has only just begun flight testing and certification, a process it should have concluding were the project on schedule.

Outside of Dubai, Etihad is in the middle of a transition with new CEO Tony Douglas to come in only once the new year begins. However, Air Arabia CEO Adel Ali indicated to Bloomberg in May that rates were looking better for leased aircraft, and that the second half of the year would play out better for the airline which only recorded a four percent drop in profits the past year, the lowest among the Gulf’s airlines.

Saudi Arabian Airlines might take the opportunity to add more fuel to its plans to redefine the Middle East market. The airline is looking at over 30 flights per hour out of its base in Jeddah once the new Terminal opens. It has also made public its intention to announce a new aircraft RFP for its new low-cost subsidiary Flyadeal.

The total order book in 2015 was US$37.2 billion, according to the show’s organisers, making it hard to see numbers from 2013 being matched, says Leonard Favre, managing director, 1BlueHorizon. “Some announcements might be expected from the defense sector, and defense means usually big numbers.”

All eyes will be on Emirates and the A380, he says. “I would not expect any major orders, however we don’t know what Emirates and Airbus are cooking for the A380 program. They have to make an announcement because EK might not want to have a big fleet of an aircraft that might cease production very soon.”

Others too are sceptical about big orders at the Airshow. “I’d think not,” says John Strickland of JLS Consulting. “All three big Gulf carriers have significant outstanding orders. Emirates is interested in smaller wide bodies but may not be ready to commit yet as it works through its new partnership with Fly Dubai. It also needs more certainty from Airbus about planned improvements on the A380. Etihad is likely to reduce some capacity short term as it reviews it’s development strategy and Qatar has a pretty full order book whilst still having to deal with the geo-political challenge,” he says.

In Clark’s own words, he “doesn’t want to focus on the Dubai Airshow.” Speaking to Reuters last month, he said, “The important thing is to get the right deal for the company at the time that suits us, not driven by a guillotine in the middle of November.”

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