ME carriers set for more growth

Both aircraft manufacturers on Monday announced their next 20-year forecast and looked bullish for the Middle East as the region’s carriers continue to surpass global air traffic and capacity growth rates.

The top three airlines in the Middle East — Emirates, Etihad Airways and Qatar Airways — are spending heavily on expansion and fleet replacement.

“We are really bullish as the Middle East is bullish on aviation,” Airbus chief operating officer John Leahy told reporters at a news conference at the Dubai Airshow 2011.

Airbus predicted that the Middle East region would require some 1,920 new planes worth more than $347 billion in the next two decades. The European plane maker estimates the region’s passenger numbers will grow 6.4 per cent annually — well above the predicted world average increase of 4.8 per cent.

On the other hand, Boeing announced bigger numbers as the US airplane manufacturer thinks the potential market is even larger. The region would need 2,520 planes worth $450 billion by the end of 2030, Boeing said in its forecast, which released shortly after Airbus.

Its clear that both Airbus and Boeing share similar views with regard to regional growth and also in relation to demand for low cost airlines, according to an analyst.

“While Airbus and Boeing may differ on their product strategy, they seem to be fairly similar when it comes down to their market assessments. The real divergent point for the two companies is based on the need for large airplanes,” Saj Ahmad, chief analyst at FBE Aerospace London, told Khaleej Times.

With the service entry of the 787, it and the 777 and A350 will form the back bone for major airline fleets as was seen by Emirates order at the show this week, there seems to be limited scope for bigger jets like the A380 whilst airports engage in infrastructure growth, Ahmad added.

Boeing estimates that the Middle East’s fleet of passenger airplanes will grow from a current fleet of 1,040 airplanes to a projected 2,710 airplanes, an increase of 160 per cent. Thirty-four per cent of the projected demand will be for airplanes to replace current aircraft, while 66 per cent will be part of fleet expansion plans, as the region’s airlines gear up for significant growth over the next two decades.

“The Middle East has seen an unprecedented growth in capacity over the past 10 years and every indication points to a further, significantly large increase over the next 20 years,” said Boeing commercial airplanes vice-president of marketing Randy Tinseth.

The region’s airlines with their forward thinking approach have become a competitive force globally, Tinseth said.

Single- and twin-aisle airplanes will account for 90 per cent of the Middle East’s new airplane deliveries over the 20-year period, according to the Boeing forecast. An estimated 1,160 single-aisle jets, such as the Boeing 737 MAX, and 1,110 twin-aisle airplanes, such as the Boeing 777 and 787 Dreamliner, are expected to be delivered to the region during this time.

The remaining ten per cent is split between large airplanes such as the Boeing 747-8 Intercontinental will account for seven per cent of projected demand, with an estimated 180 airplanes to be delivered to airlines in the Middle East, while regional jets will account for the remaining three per cent.

“The collective capacity of three airlines, Emirates, Etihad Airways and Qatar Airways, has grown by an average of 23 per cent annually over the past decade and we expect this trend to continue well into the future,” Tinseth said.

Airbus thinks that the main drivers of the continued strong demand for new aircraft include fleet expansion and replacement, greater urbanisation, an increasing number of mega cities and the overall ongoing expansion of the region as a geographical hub and tourist destination. With today’s aircraft capabilities every major destination around the globe is within reach of a direct flight from the Middle East.

Airbus’ Leahy said the region is uniquely placed with more than 85 per cent of the world’s population within reach of a direct flight, making the Middle East a fertile market place for our eco-efficient aircraft today and beyond.

“The Middle East remains one of the world’s most robust aviation regions and this is confirmed by a 200 per cent increase in inter-regional passenger traffic over the last 10 years,” he said.

Middle Eastern carriers are increasingly choosing larger aircraft due to the growing number of global hubs in the region, and particularly within aircraft families for the reduced training and maintenance costs, reduced fuel burn and environmental benefits they bring.

The region’s new passenger aircraft requirement includes: 779 single-aisle aircraft, such the A320 Family valued at $57.3 billion; 801 twin-aisle aircraft such as the A350 XWB valued at $179.8 billion and 302 very large aircraft, or VLA, such as the A380 valued at $99.2 billion, according to Airbus.

Of these, 1,442 aircraft will be necessary for growth and 440 for replacing ageing aircraft with newer more eco-efficient models, Leahy said. In the freighter aircraft category, there will be a demand for 13 twin aisle aircraft and 26 VLA aircraft, he added.

abdulbasit@khaleejtimes.com