Airshow orders impact industry

With the aviation industry feeling the full effects of these economically uncertain times, airlines are looking towards eco-efficient aircraft as a means to cut costs and drive success. In the wake of Dubai Airshow 2011, David Robertson reflects on the major announcements and predicts the future impact these will have on the industry

During the current global economic uncertainty the aviation industry is perhaps more concerned about surviving than it is about growing. Nowhere is this more apparent than in Europe and North America, where a combination of a high number of airlines, rising fuel costs and demand for low-cost flights is squeezing profit margins.

Despite these difficult times, Dubai Airshow 2011 was the biggest in its 22-year history and played host to a number of exciting industry announcements, the result of which look set to have a major impact on the shape of the international aviation industry in years to come.

Emirates Airline, Dubai’s flagship carrier, placed the largest single aircraft order in history at the show, with Chairman and CEO Sheikh Ahmed bin Saeed Al Maktoum signing an agreement for 50 Boeing 777 aircraft in a deal worth US$18bn with Jim Albaugh, President and CEO of Boeing Commercial Airplanes. In addition, Emirates has options to buy a further 20 aircraft taking the total value to US$26bn at list prices.

Such huge aircraft orders mean that Emirates can now dictate to manufacturers the specifications it wants on new planes, giving it a competitive advantage over other carriers who will simply have to take what they are offered. The next generation of 777 will be developed largely to satisfy the airline, a reflection of just how powerful the Dubai-based carrier has become in the aviation market.

Boeing is under pressure from Emirates to deliver a lighter version of the 777 – up to 10 tonnes lighter – that will enable the airline to operate unrestricted services from Dubai to Los Angeles. This is one of the longest routes in the world at 13,400 kilometres (16.5 hours) and Emirates’ existing 777s can only do it by limiting cargo and passenger numbers.

Chris Tarry, Aviation Analyst at CTAIRA, a specialist aviation consultancy, said: “The Boeing 777 is an extremely capable machine and is perfect to provide incremental growth to Emirates. It is ideal for linking Asia to Africa and South America via Dubai.”

The hope is that the 777x will enable Emirates to operate to Los Angeles with a full payload but will also enable the carrier to reach destinations like Lima in Peru and Santiago in Chile for the first time. This will mean that every major city in the world can be connected with just a single stop in Dubai. If Boeing delivers on that promise, it is reasonable to assume that 2011 will not be the last time a major 777 order is made by Emirates at the Dubai Air Show.

In addition to the 777s, Emirates plans to buy 90 of Airbus’s doubledecker A380. Despite scepticism from European counterparts, company executives are confident it will be able to fill all its new aircraft. Indeed, figures for 2010 revealed the airline carried 31 million passengers last year, and there is little sign of its growth rate slowing.

As environmental policies continue to play a more pivotal role in an airline’s success – and saving on fuel costs becomes more important than ever – eco-efficient aircraft models are making waves across the industry. Boeing’s much-hyped 787 Dreamliner was present in the Gulf for the first time at the Airshow. The Dreamliner is the only passenger jet to be majority constructed from composite materials and this has made it lighter and, therefore, more environmentally friendly. Its carbon emissions will be 20 per cent lower than existing aircraft and, more importantly for the hard-pressed aviation industry, will cut fuel bills by the same amount.