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Gulf airlines splash over $150 billion

DUBAI - Gulf airlines splashed out over $150 billion on new plane deals on day one of the Dubai Airshow, underscoring a shift in power in the aviation industry.

DUBAI – Gulf airlines splashed out over $150 billion on new plane deals on day one of the Dubai Airshow, underscoring a shift in power in the aviation industry and giving a boost to the formal launch of Boeing’s newest jet, as well as to Airbus’s A380 superjumbo.

Under hazy skies, sheikhs and ruling family members of Dubai and neighbouring Abu Dhabi toured rows of passenger jets and arms pavilions at the new 645 000 square meter venue, built to showcase the Middle East’s largest aviation hub and take on the industry’s traditional showcase events in Britain and France.

Dubai-based Emirates led the buying spree on Sunday with an order for 150 of Boeing’s new 777 mini-jumbo, in a deal worth $76 billion at list prices.

It also ordered 50 Airbus A380s, the world’s biggest passenger plane, worth $23 billion.

With demand from other Gulf carriers including Etihad Airways and Qatar Airways, Boeing announced commitments for a total of 259 of the new 777 jet, previously codenamed 777X, worth about $100 billion at list prices – the largest combined order in its history and confirming earlier Reuters stories.

“The response to the 777X has been astounding,” Boeing Chairman James McNerney said.

Gulf airlines are competing with each other for a share of traffic flooding through the region due to its growing prosperity and strategic location between East and West. And with many recession-hit, European airlines strapped for cash, Gulf business is increasingly important to Boeing and Airbus.

The revamped 777 marks a new front in the battle between the two aircraft manufacturers that dominate the civil aviation industry. Boeing’s new plane is aimed at heading off competition from the largest version of Airbus’s A350 in the mini-jumbo market that drives growth and connectivity between continents.

Boeing pledged not to let a dispute with Seattle assembly workers over where the new 777 should be built interfere with its launch, which kicked off the November 17-21 Dubai show.

The US group is looking for a home for the new jet after members of the International Association of Machinists rejected a proposed contract that would have seen Boeing commit to keeping the latest member of the 777 series near Seattle in exchange for restructured benefits.

With Boeing also agreeing deals for 30 of its 787 Dreamliners with Etihad and for over 100 of its 737 planes with budget carrier flydubai, the US manufacturer looked on course to defeat Airbus in the battle for orders at the Dubai show.

However, as well as the order from Emirates, Airbus announced a deal for 87 aircraft with Etihad which, including options for 30 more, could be worth $26.9 billion.

The European group also has a record of springing surprises, and is keen to prevent a smooth lift-off for the new 777.

Emirates’ A380 order was something of a coup for Airbus, which is under pressure to revive the fortunes of a plane that previously had not found any buyers this year and faces a cut in output unless empty 2015 production slots can be filled.

Emirates is already the biggest customer of the A380 and its order for 50 more was at the top end of expectations, and brings its total orders for the plane to 140.-Reuters