Gulf nations splash out on Boeing, Airbus jets

Persian Gulf countries, rich from record-high oil prices, announced deals in the United Kingdom Monday worth $15-billion for the latest fuel-efficient aircraft and other passenger planes made by Boeing and Airbus.

Deals involving the United Arab Emirates and Saudi Arabia were revealed on the opening day of the latest Farnborough International Airshow, outside London, a key event in the commercial aviation industry calendar.

Etihad Airways, the national carrier of the United Arab Emirates, led the way on Monday—announcing a deal to buy 45 Boeing mid-sized passenger jets, including 35 fuel-efficient Dreamliners, worth $9,4-billion.

New low-cost airline FlyDubai announced a $4-billion deal for 54 single-aisle Boeing 737 passenger jets, putting the United States group in pole-position early on at the show in its traditional orders battle with Airbus.

However, Boeing’s European rival did win an order on Monday for eight wide-bodied Airbus A330s, worth $1,6-billion, from Saudi Arabian Airlines. Airbus was set to announce other orders later in the day.

Oil-producing states are snapping up new aircraft thanks to extra revenue earned from rocketing crude prices, which struck record highs last Friday, passing $147 a barrel.

Soaring fuel costs are, meanwhile, encouraging airlines to invest in more energy-efficient planes.

Etihad, which launched in 2003, said on Monday it had agreed to purchase 35 Dreamliner 787 jets—which await their first delivery after being beset by delays—and 10 Boeing 777s.

“The new-generation Boeing aircraft we have ordered are among the most fuel efficient and will help maintain Etihad’s fleet as one of the youngest and greenest in the sky,” Etihad chief executive James Hogan said in a statement issued following a press conference.

Etihad said it will take delivery of the 777s in 2011 and the Dreamliners in 2015. Boeing had announced the $9,4-billion deal ahead of the Farnborough show but had not revealed Etihad as the client until Monday.

This year’s Farnborough event, taking place 60 years since the first show, was attracting the usual mix of industry executives and plane enthusiasts for deal-making and the witnessing of flypasts by civil and military jets.

Canadian planemaker Bombardier had stolen the limelight on the eve of this year’s gathering by announcing on Sunday that it planned to launch its eco-friendly CSeries single-aisle passenger jet in 2013—a plane it promised would “deliver dramatic energy savings”.

German airline Lufthansa said it was interested in buying 30 CSeries jets in the role of launch-customer, adding it could increase the order to 60, which would earn Bombardier a total of $2,8-billion.

Other fuel-efficient commercial planes already being flown or awaiting their launch include the Airbus A380 superjumbo and mid-sized A350.

Soaring fuel costs have caused several airlines to collapse.

In the first six months of this year, 25 airlines went bust or ceased operating and more could fold as jet-fuel prices continued to rise, a spokesperson for aviation industry association Iata said last week.

“For our customers, clearly the volatility of fuel price remains a huge issue for them,” Scott Carson, president and chief executive of Boeing Commercial Airplanes, told reporters gathered at Farnborough on Monday.

“Perhaps the volatility is a larger issue than the price bubble itself.
If the price was predictable for our customers, they could respond much more appropriately to the situation they find themselves in.”

But Carson added that Boeing feels confident about the outlook for its products as customers “retire older aircraft and seek to replace them with [fuel-efficient] aircraft”.—AFP

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