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Thu 17 Sep 2015 10:55 AM

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MidEast defence sales rising, despite oil price slump, says Boeing

US aviation giant to showcase at Dubai Airshow in bid to secure growing appetite for defence products

MidEast defence sales rising, despite oil price slump, says Boeing
(AFP/Getty Images)

The slump in oil prices has not dented Gulf state's defence budgets, senior executives at Boeing have claimed, with the US plane manufacturer aiming to use the upcoming Dubai Airshow to tap into the “growing” appetite for maritime surveillance aircraft.

“It has not affected the appetite for customers in the Middle East,” Chris Chadwick, president and CEO of Boeing Defense, Space and Security, told reporters in Seattle on Wednesday when asked if the declining price of oil had reduced demand for its defence products.

Despite the price of oil dropping below $50 to around $47 this week, and prices last month hitting 6-1/2 year lows, Chadwick claimed defence sales in the region were actually on the rise.

“The data we see is the Middle East spend for defence, space and surveillance products is growing,” he said. International revenue had traditionally accounted for around 12 percent of the overall Boeing defence, space and surveillance revenues. This has risen to 25 percent at present and is set to rise to around 30-35 percent, with “a significant amount of that” coming from the Middle East, Chadwick claimed.

The Boeing defence chief will visit the upcoming Dubai Airshow in early November for the first time, where the American giant will showcase its arrange of products, focusing on its range of maritime surveillance aircraft.

At the Dubai Airshow two years ago, Boeing announced it was partnering with Bombardier to launch a new maritime surveillance aircraft program. It claimed at the time it had been in talks with several Gulf countries to buy the aircraft. With the prototype now ready, it will be holding demonstrations in Dubai in a bid to secure the first sale of the new model.

“We have received interest from several countries. We are in various levels of discussions for our first sale... We will be doing demonstrations in Dubai. We are in discussions and leaving the options open if countries are interested,” said Bob Schoeffling, Senior Manager, Global Sales & Marketing of Maritime Surveillance Aircraft (MSA) at Boeing.

The P-8 Poseidon, which is a maritime surveillance aircraft built around the Boeing 737 aircraft and used for anti-submarine warfare by air forces in the US, Australia India, will also be on display at the Dubai Airshow, where Boeing is aiming to make its first sales for the aircraft in the region.

“There is an appetite in the Middle East for this aircraft because of its unmatched capability,” said Steve Tripp, Manager, P-8 Poseidon Business Development, Mobility, Surveillance & Engagement.

Last month, Boeing announced a $1.49 billion deal to provide the first P-8A Poseidon maritime surveillance aircraft to the Australian air force and an additional four to the US Navy. This places the cost for the average P-8 to around $114 million. However, Boeing states that the smaller MSA aircraft, which does not have any combat capabilities, costs around a third of the P-8.

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