Flying in the face of adversity

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While the Middle East is one of the only markets in the world where passenger traffic numbers are still growing, the downturn has clipped the wings of the once soaring aerospace sector.

Traffic is a great litmus test of any event in Dubai. On the morning of this year's Cityscape Dubai traffic seemed to flow perfectly as normal. The lack of headline grabbing launches and a lacklustre property sector led many visitors and exhibitors to give the event a miss.

The organisers of the Dubai Airshow 2009 however, boasted that space had increased ten percent on 2008, nearly 900 exhibitors were attending, 130 aircraft would be on show and 50,000 visitors were expected.

Official attendance was not available at the time of going to press but exhibitors did indeed complain of traffic congestion and taxi queues were back to levels that haven't been seen in a long time.

Would this year's show bring in the big deals or would it prove to disappoint like the Paris show before it?

In his welcome speech at the 11th Dubai Airshow, HH Sheikh Ahmed bin Saeed Al Maktoum, chairman of Emirates Airline and chairman of Dubai Airports, was bullish about the show's prospects and the region's future.

"The airshow comes at an important time for the aerospace industry as the world begins to see a revival in fortunes.

"During the past two years, the business has experienced unprecedented turbulence. However, I am very pleased that many of the organisations at the show this year were among those that continued to invest in the industry during the worst of times.

"It is the Middle East - and the GCC in particular - that has seen a growth in air transport, while elsewhere there have been falling passenger numbers," he added.

The Middle East region has indeed managed to buck global trends. Dubai International Airport reported that passenger traffic rose 11.7 percent in October, the fifth consecutive month of double digit growth and a rise so far this year of 8.3 percent compared to the same period last year.

On a global scale, statistics from the International Air Transport Association (IATA) showed that the Middle East is the only region in the world to see air traffic growth stay in the black.

Overall, global revenue per passenger per kilometre measures for the first nine months of 2009 fell 5.3 percent, in Asia/Pacific the figure was down 8.8 percent and in North America it declined 6.7 percent, while the Middle East has surged forward 9.4 percent. The region is literally going in the opposite direction to the rest of the world.

As a result, Airbus's Global Market Forecast predicts that Middle East-based carriers will need more than 1,418 new aircraft, valued at around $243bn, over the next twenty years.

"The Middle East market encompasses all aircraft segments and is a barometre for the rest of the world. The recovery begins here," John Leahy, Airbus chief operating officer - customers said at the Dubai Airshow.

Airbus' main rival Boeing forecast its twenty year regional requirement slightly higher at 1,580 aircraft worth $260bn, however while it is confident about the long-term future of the region it does see difficulties in the short-term.

"This is a very important market for us... and is one that will continue to have very good growth prospects," Jim Albaugh, president and CEO of commercial airplanes, told Arabian Business at a roundtable discussion at the Dubai Airshow.

The Middle East makes up about 25 percent of Boeing's backlog and about 19 to 20 percent of its revenue. However Albaugh said he does not see the region being immune from the global economic slowdown and that orders in the region will slow "dramatically over the next several years".

"A lot of customers who haven't been able to cover the cost of capital [are] being very careful about how they enter the market again," he added.

However, Sheikh Ahmed said at the Dubai Airshow launch press conference that he was "not happy" with aircraft delays and later revealed that Emirates was in discussions with both Airbus and Boeing about possibly increasing its fleet, which is already running flat out.

Emirates Airline is currently the world's largest operator of the Boeing 777 and it has reported that profits rose 165 percent to $205m during the first half of this year.

Canadian jet maker Bombardier arrived at Dubai to try and secure its first CSeries Middle Eastern jet customer and reported that it had so far received a lot of interest.

On a global scale, the manufacturer is still feeling the impact of the global downturn. "We are not bringing in orders fast enough to offset our production rates," Gary Scott, president of commercial aircraft at Bombardier told Arabian Business.

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