Gulf airlines splash out over $150 billion as Boeing launches new jet

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getNewsImages2 Gulf airlines splash out over $150 billion as
Boeing launches new jet

By Praveen Menon and Nadia Saleem
DUBAI (Reuters) - Gulf airlines splashed out over
$150 billion on new plane deals on day one of
the Dubai Airshow, underscoring a shift in
power in the aviation industry and giving a
boost to the formal launch of Boeing's newest
jet, as well as to Airbus's A380 superjumbo.
Under hazy skies, sheikhs and ruling family
members of Dubai and neighboring Abu Dhabi
toured rows of passenger jets and arms
pavilions at the new 645,000 square meter
venue, built to showcase the Middle East's
largest aviation hub and take on the industry's
traditional showcase events in Britain and
France.
Dubai-based Emirates led the buying spree on
Sunday with an order for 150 of Boeing's new
777 mini-jumbo, in a deal worth $76 billion at list
prices. It also ordered 50 Airbus A380s, the
world's biggest passenger plane, worth $23
billion.
With demand from other Gulf carriers including
Etihad Airways and Qatar Airways, Boeing
announced commitments for a total of 259 of the
new 777 jet, previously codenamed 777X, worth
about $100 billion at list prices - the largest
combined order in its history and confirming
earlier Reuters stories.
"The response to the 777X has been astounding,"
Boeing Chairman James McNerney said at a
packed news conference to officially launch the
new plane, in front of Dubai ruler Sheikh
Mohammed bin Rashid al-Maktoum.
Gulf airlines are competing with each other for a
share of traffic flooding through the region due
to its growing prosperity and strategic location
between East and West. And with many
recession-hit European airlines strapped for
cash, Gulf business is increasingly important to
Boeing and Airbus.
The revamped 777 marks a new front in the
battle between the two aircraft manufacturers
that dominate the civil aviation industry.
Boeing's new plane is aimed at heading off
competition from the largest version of Airbus's
A350 in the mini-jumbo market that drives
growth and connectivity between continents.
Boeing pledged not to let a dispute with Seattle
assembly workers over where the new 777
should be built interfere with its launch, which
k!cked off the November 17-21 Dubai show.
The U.S. group is looking for a home for the new
jet after members of the International
Association of Machinists rejected a proposed
contract that would have seen Boeing commit to
keeping the latest member of the 777 series near
Seattle in exchange for restructured benefits.
BOOST FOR THE A380
With Boeing also agreeing deals for 30 of its 787
Dreamliners with Etihad and for over 100 of its
737 planes with budget carrier flydubai, the U.S.
manufacturer looked on course to defeat Airbus
in the battle for orders at the Dubai show.
However, as well as the order from Emirates,
Airbus announced a deal for 87 aircraft with
Etihad which, including options for 30 more,
could be worth $26.9 billion.
The European group also has a record of
springing surprises, and is keen to prevent a
smooth lift-off for the new 777.
"Airbus is desperate to blunt the impact of the
777X," said a senior industry source, speaking on
condition of anonymity.
Emirates' A380 order was something of a coup
for Airbus, which is under pressure to revive the
fortunes of a plane that previously hadn't found
any buyers this year and faces a cut in output
unless empty 2015 production slots can be filled.
Emirates is already the biggest customer of the
A380 and its order for 50 more was at the top
end of expectations, and brings its total orders
for the plane to 140.
In a sign of the Gulf's increasing power in the
industry, Emirates Chairman Sheikh Ahmed bin
Saeed Al Maktoum said he was confident of a
shift in stance in the West that would allow the
group to fly more of its planes to airports there.
"We are buying a product from their countries.
So why would they not allow us to fly to these
airports? If they don't, they can take their planes
back," he said.
A group representing U.S. airline pilots,
meanwhile, warned that the sale of hundreds of
planes to Gulf carriers that compete with U.S.
carriers would have "serious consequences for
the U.S. economy and U.S. airline workers."
MINI-JUMBO BATTLE
Boeing's new 777 comes in two models including
what will be the world's longest-distance
passenger jet, a 350-seat model to be known as
the 777-8 once the aircraft has been launched.
The larger 777-9 edition, carrying 406 people,
will be the main version and be delivered
starting 2020.
Together, the modernized planes call for
development of carbon-fiber wings that fold at
the tips to fit in the same parking spaces and
new engines from General Electric.
Airbus says Boeing has packed in passengers
densely to make the revamped aircraft's
economics work against its own all-new 350-seat
model, the A350-1000, due to enter service in
2017.
It has launched a campaign for a minimum
standard seat width of 18 inches on long trips,
aiming to draw attention to what it says will be
the 777's narrower seats.
Some airlines have told Airbus that this is their
decision and Boeing says many Airbus jets have
similar seats.
Highlighting defense deals also at stake at the
November 17-21 air show, UK Prime Minister
David Cameron toured the complex even before
the event had started, telling the heads of British
aerospace and defense companies to "get out
there and win".
Britain is competing with France for a potential
60-plane fighter jet deal with the United Arab
Emirates.



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