Dubai Airshow set for jet deal bonanza as airlines clamour for new planes

Orders could range from 300 to more than 400 aircraft, according to estimates by industry analysts

The UAE's Al Fursan aerobatics team perform a fly-over above Dubai World Central in 2021. Photo: EPA

The Dubai Airshow will start on Monday, setting the stage for a flurry of orders as airlines seek to secure coveted delivery slots for the latest fuel-efficient jets amid a post-coronavirus boom in air travel.

Orders could range from 300 to more than 400 aircraft this year at the air show, where some of aviation industry's biggest deals have been signed in the past, according to estimates by industry analysts.

“Anticipation is high for a healthy volume of commercial aircraft orders at the Dubai Airshow, in light of the optimistic order books seen at similar global events,” Linus Bauer, founder and managing director of Bauer Aviation Advisory, told The National.

“The urgency to secure delivery slots might still drive some competitive fervour among carriers, especially those looking to modernise or expand in a crowded market.”

What to expect

Emirates is widely expected to make the biggest announcements after airline president Tim Clark said in June he was in the market for additional wide-body aircraft.

The airline is looking at Airbus A350s, Boeing 777-9s and “possibly” the smaller Boeing 787 Dreamliners, he said.

Sister airline flydubai, which operates an all-Boeing fleet, said in September it was in discussions with plane makers for a new order of narrow-body aircraft.

The airline's decision was being affected by the “availability of aircraft at the right time”, flydubai chief executive Ghaith Al Ghaith said at the time.

UAE-listed Air Arabia is also close to reaching a decision on an engine that will power the 120 Airbus A320 family of jets it ordered at the Dubai Airshow in 2019.

It in discussions with General Electric's CFM venture and Pratt & Whitney, the rival providers for the Airbus A320 Neo, for the engine order.

Also joining the fray will probably be Riyadh Air, Saudi Arabia's new airline start-up that is building a fleet from scratch. The company's chief executive Tony Douglas said earlier this month that “hopefully, there will be a narrow-body order soon”.

Airbus and Boeing will vie to announce the highest number of commercial jet deals at the Dubai Airshow. The duopoly is seeking to end 2023 on a high note after racking up record orders at the Paris Airshow in June.

Global leaders from the aerospace, space and defence industries will gather from November 13 to November 17 at Dubai World Central.

The 18th air show, held every two years, is set to be its biggest so far, with more than 1,400 exhibitors from 95 countries, according to the event organisers.

Visitor numbers are expected to grow from the 104,000 registered during the 2021 show.

This year's air show is significant as it comes amid a strong recovery in air travel demand from the Covid-19 pandemic. The travel boom boosted airline profits to record levels as passengers took full advantage of their freedom to travel.

Airlines in the Middle East in September recorded a 26.6 per cent annual increase in passenger traffic, according to the latest monthly report by the International Air Transport Association.

Their capacity rose 23.7 per cent while the load factor climbed 1.9 percentage points to 81.8 per cent.

Globally, total passenger traffic stood at 97.3 per cent of pre-pandemic levels.

Wide-body aircraft market

Richard Aboulafia, an aerospace analyst at AeroDynamic Advisories, estimates that total orders at the air show could exceed 300 aircraft.

Wide-body jets have lagged the strong recovery in other segments of the aerospace industry, and since Gulf airlines tend to opt for these twin-engine jets, “there are big hopes for wide-body orders” during the Dubai Airshow, he said.

However, new-generation narrow-body aircraft now offer airlines longer range, better economic viability and more route flexibility, so single-aisle jet purchases could make up the biggest chunk of orders at the air show.

“Given Airbus' strong narrow-body position, they'll likely come out ahead,” Mr Aboulafia said. “Emirates' wide-body aircraft decision will be key.”

Overall, orders at the Dubai Airshow could exceed 400 aircraft, Jefferies analyst Sheila Kahyaoglu said in a research note.

“Dubai is central to many Middle Eastern carriers' orders and could feature several mega-deals despite the current Middle East order book already at 73 per cent of the fleet,” she said.

Airlines are clamouring to lock in orders amid limited delivery slots, long backlogs hat are stretching past 2030 and lengthy handover delays by the plane makers.

Competition among airlines is also heating up in the Middle East.

Saudi Arabia's ambitious aviation plans include new airline Riyadh Air, a new airport in the capital, and new aircraft orders, John Grant, senior analyst at travel data firm OAG, said.

The orders at the Dubai Airshow will happen in a “measured tone”, given that backlogs for wide-body jets are less lengthy and that plane makers are planning to increase their pace of production, said George Ferguson, a Bloomberg Intelligence senior aerospace analyst.

Supply chain and sustainability concerns

Also at the top of aviation leaders' minds at the Dubai Airshow will be the supply chain bottlenecks that have plagued the industry since the onset of pandemic.

“Supply chain considerations will loom large over the show. Nobody can get the jets they want when they want them,” Mr Aboulafia said.

Airline fleet planners “have to be mindful that their orders may take even longer until delivery and factor this into their order game plan”, Mr Ferguson said.

However, at the air show, supply chain woes will be “positioned as a short-term hiccup” for the industry, which is expected to resolve itself in the next couple of years, Mr Grant said.

Industry leaders will also debate the question of how to reach their sustainability goals of net zero by 2050 and whether that timetable is achievable.

“There will be much talk amongst attendees about climate challenge, with manufacturers of both aircraft and engines eager to show the efforts they are making and new technologies available to address the issue with products on offer along with development projects,” John Strickland, head of UK-based JLS Consulting, said.

Strong travel demand growth and high air fares may also come under pressure as inflation and economic uncertainty affect consumer spending. Airlines are also facing higher jet fuel prices.

“The headwinds of inflation, political unrest, fuel costs and logistical hurdles pose questions about the durability of this growth phase,” Mr Bauer said.

“The industry might have to navigate through potential consolidation and form strategic partnerships to keep the momentum.”

Meanwhile, the Israel-Gaza war will also be high on the minds of attendees the conflict has affected several Middle Eastern airlines' operations and weighed on regional tourism inflows.

“While geopolitical events such as the recent Israel-Gaza conflict can have ripple effects on the airline industry, the direct impact on the air show's agenda might be limited,” Mr Bauer said.

“Instead, the focus may be on how the industry can maintain continuity and adaptability in the face of such geopolitical shifts, especially concerning fuel price volatility and route logistics.”