Gulf airlines build fleets at triple time

Middle East airlines are adding new aircraft three times faster than counterparts in Asia and Europe.

The region's big three long-haul airlines are adding new aircraft at rates three times faster than competitors in Europe and Asia, setting the stage for a shift in the airline industry's centre of gravity towards the Middle East over the next decade.

Emirates Airline, Etihad Airways and Qatar Airways have 550 aircraft on order, in addition to the 302 aircraft already in operation at their hubs in Dubai, Abu Dhabi and Doha, representing well in excess of US$100 billion (Dh367.27bn) in investments over the next decade.

In contrast, older, more-established European airlines have larger numbers of planes in service but have much smaller orders for replacing or expanding their fleets.

Lufthansa, British Airways and Air France-KLM collectively operate about 750 planes but have orders for 158 aircraft for delivery over the next decade.

In Asia, Singapore Airlines, another long-haul specialist that competes with Gulf airlines, operates 109 aircraft and has 48 on order.

While the Middle East fleet buildup will benefit passengers worldwide with more flights, frequencies and competitive fares, the rise of the Gulf carriers is controversial. There are signs of growing resistance from some western markets, and there is increasing speculation about whether there is room for all three on the global stage.

John Strickland, the director of JLS Consulting, said the growth of Middle East airlines, in particular Emirates, has been good for the industry but has created tension.

"Emirates is a massive airline that is changing the ways carriers are operated in many respects, and this brings them into conflict with airlines in Europe," he said, noting the efforts of the French and German governments. In Canada, Emirates's expansionary route plans have been vetoed by the government.

In contrast to their competitors' purchases, the Middle East's massive fleet acquisitions are also skewed towards large, high-capacity airliners such as the 500-seat Airbus A380, for which there are 105 orders, including 90 from Emirates.

"Emirates is the customer for the 380," Mr Strickland said, adding that the large orders enable the Dubai airline to negotiate considerable discounts from manufacturers. "They say they are packed out everywhere they choose to fly them."

The effect of Emirates's focus on extra-large aircraft has helped it to leapfrog other international airlines, and this year it became the world's largest airline by international seating capacity. A 2007 forecast by The Boston Consulting Group did not foresee Emirates achieving this feat until 2015.

This buying spree has had a major effect on the world's leading aircraft makers, which increased their marketing efforts at regional events such as the Dubai Airshow.

In 2001, North American airlines made up more than half of Boeing's aircraft sales, with only three planes purchased by Middle East operators.

By 2007, orders from Middle East airlines and leasing companies had increased to 173 aircraft, or 12 per cent of Boeing's sales, while North America's share of orders sank to 24 per cent.