Emirates Airbus A380

Gulf Will See a Drop off in Plane Orders in 2015, Says Boeing Exec

Emirates Airbus A380 (image courtesy of Emirates)

The Gulf region will not see a repeat of the massive aircraft orders witnessed last year for the foreseeable future, US manufacturer Boeing has conceded.

Airlines from the Gulf ordered 216 aircraft from Boeing in 2014, with the bulk of it made up of 150 777X aircraft ordered by Dubai’s Emirates in July. That followed 153 orders in 2013.

However, Marty Bentrott, vice president of sales for the Middle East, Russia and Central Asia at Boeing Commercial Airplanes, said the order book for 2015 would not be as impressive.

“We sold a lot of airplanes here last year, over 200 airplanes into the region. I don’t think you are going to see those kinds of quantities in terms of new orders in 2015… there are a lot of factors that will come into play,” he told Arabian Business in an interview in Dubai.

The lower forecast comes despite the biannual Dubai Airshow scheduled for November, this year. Dubai Airshow 2013 registered $206.1 billion worth of sales. The record-breaking deals from Etihad Airways, Emirates Airline, flydubai and Qatar Airways included Emirates’ $99 billion order from Boeing and Airbus, dubbed the largest-ever aircraft order in civil aviation.

“I think they will have orders, but I don’t think you will have the same magnitude as you did at the last Dubai Airshow, Bentrott predicted. “There will be some select opportunities but big orders for near-term deliveries, I don’t see that.”

One potential sale up for grabs is the replacement of the 70 A350 aircraft Emirates canceled with Airbus last year, and which is currently being renegotiated.

Emirates previously said it had cancelled the A350 order after Airbus changed the plane’s specifications, but said it would look closely at how the aircraft performs once it starts flying.

“They [Emirates] cancelled their A350s last year and they have been talking about doing a replacement for that previous commitment, so that is maybe 70 airplanes. [Also] Qatar and Akbar [Al Baker, CEO of Qatar Airways] is always in the market looking for opportunities,” Bentrott said of the orders Boeing was targeting for 2015.

Emirates president Tim Clark told Reuters the carrier would need new widebody planes from 2019, although it could also keep older planes in service for longer. He added by that time the A350 would be in competition with Boeing’s 787-10 jet, which is due to enter service in 2018.

Bentrott said he believed the slump in oil prices, which fell almost 50 percent in 2014 and is currently hovering around the $60 a barrel mark, was not a factor in the reduced number of sales likely from the Gulf.

“I haven’t sensed that at all and we haven’t had any fall-off relative to backlog or demand as a result of the change in oil prices today.”

One socio-political issue that may impact Boeing’s sales, is the increasingly bitter war of words developing between major US and Gulf carriers.

Delta Air Lines, United Airlines and American Airlines have asked the White House to look into the financial statements of the three big Gulf carriers, which they accuse of receiving more than $40 billion in subsidies from their governments since 2004.

The big US players have called on Washington to renegotiate or cancel the open skies agreements it has with the UAE and Qatari governments.

“Boeing supports a commercial-aviation industry based on open and fair competition, and open skies has long been a key factor in this, benefiting both US and international airlines,” Boeing spokesman Jim Proulx said in an emailed statement in February, and later adding that it was reluctant to jump directly into the feud between some of its biggest airline customers.

“I would just say that it is a known fact that our customers acquire airplanes to be able to serve the global market and if for some reason the dynamics of that global marketplace changes, whether it be open skies or something else, demand for products could change with it,” Bentrott said.

“We at Boeing believe open skies is important, important to the industry, important to the world economically and we believe it is important to the consumer and we will have to see how all this debate plays out. We do believe in fair competition.”

Emirates group chairman and chief executive Sheikh Ahmed bin Saeed Al Maktoum also addressed the link between airspace access and plane orders during a speech at the Dubai Airshow in 2013.

Speaking about constraints the Dubai carrier faced in Europe and North America, particularly in Canada, he lashed out at countries that block international airlines’ expansion by limiting landing rights.

“We are buying a product from their countries… Why would we buy something when they will not allow us (to increase landing capacity)? Then they can take the aircraft back. But I don’t think something like this will happen. I always look at the future as positive and I think we’ll be able to fly to more and more airports,” he said.

“As a salesman for the Boeing Company I don’t control the outcome,” Bentrott said when asked if he was worried whether the current arguments over subsidies and open skies could lead to Gulf carriers being reluctant to buy US-made planes.

“I hope that, in the end, the US government will come to the right conclusion about the value of open skies to the United States because with open skies you are not just talking about the carriers from this part of the world, you are talking about carriers from around the world. It brings people from around the world to the US. It creates jobs, it creates opportunities for people to then travel to those countries and, for us, the Boeing Company, if the demand is there for our aircraft, to sell them and create a lot of jobs in the US which is good for the US economy,” he added.

Continues at http://www.arabianbusiness.com/gulf-will-see-drop-off-in-plane-orders-in-2015-says-boeing-exec-584545.html

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