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Gulf airlines show spending power

Monday, Nov 18, 2013 - 02:13

Nov 18 - Airbus and Boeing announce deals to buy more equipment from the United Arab Emirates, as Gulf states try to boost their local economies from massive plane orders. Sonia Legg looks at the impact of the growing Gulf airlines on the rest of the world.

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They built a new venue to host the Dubai air show - a sign perhaps of the increasing importance of Gulf airlines. While European and US firms struggle with high fuel prices and weak margins - the Gulf's big players keep spending. $150 billion was spent on the first day of the show - much of it going to Boeing as Emirates, Etihad and Qatar Airways ordered new 777s. Boeing's CEO and Chairman Jim McNerney. (SOUNDBITE) (English) PRESIDENT, CEO AND CHAIRMAN OF BOEING, JIM MCNERNEY, SAYING: "The combined value of the commitments is almost 100 billion dollars at list prices making it the largest the largest product launch in commercial jetliner history." Emirates also bought more A380s from Airbus - bringing some relief to the European planemaker. It was their first superjumbo order this year. President and CEO Fabrice Bregier. (SOUNDBITE) (English) PRESIDENT AND CEO OF AIRBUS, FABRICE BREGIER, SAYING: "Today's agreement is the fifth A380 order from Emirates and this is by far the largest with 50 aircraft which brings the total of A380 orders to 140." Gulf States - keen to diversify away from energy - see the airline industry as a new economic tool. Dubai-based Emirates led the spending spree - CEO Sheikh Ahmed Al-Maktoum. (SOUNDBITE) (English) CHAIRMAN AND CHIEF EXECUTIVE OF EMIRATES AIRLINE, SHEIKH AHMED AL-MAKTOUM, SAYING: "Both Emirates and Fly Dubai order will support hundreds of thousands of jobs in aviation for the next decades and more." The impact of the deals spread beyond the airlines - engine maker Rolls Royce was one of the winners, says ETX Capital's Joe Rundle. (SOUNDBITE) (ENGLISH) : JOE RUNDLE, ETX CAPITAL, SAYING: "It seems to have the right engines, it has a good tie-up with Boeing and Airbus so we should see it driving forward and there does seem to be a lot of spending power with the Gulf airlines investing in a new fleet." The rise of Gulf airlines hasn't gone unnoticed in Europe and the US. One US pilots' group recently warned it could have a significant economic impact. Emirates is certainly confident its buying frenzy will give it access to more western airports. And it seems the region as a whole is already benefitting from returned favours. Airbus and Boeing have just ordered $5 billion worth of parts and materials from Abu Dhabi.

Gulf airlines show spending power

Monday, Nov 18, 2013 - 02:13

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