A revitalised Boeing swoops in with huge Saudi deal – and it is up for more

Dubai: The US aviation company Boeing recently sealed a deal with Saudi Arabia to supply 78 787 Dreamliners as the Kingdom seeks to shift gears on economic growth and launch a new airline – Riyadh Air – to boost travel and tourism. And take on established rivals in the region.

Gulf News spoke to Omar Arekat, Boeing’s Vice-President Commercial Sales and Marketing for Middle East and Africa, to understand what the global aviation market looks like in 2023, and how the Middle East region is expected to fare.

How long was the deal with Saudi Arabia in the works? How did it materialise?

While we cannot comment on discussions with our customers, we can confirm that Riyadh Air has selected up to 72 787-9 Dreamliners, with an order of 39 airplanes with options for an additional 33 jets. Saudia has selected up to 49 787-Dreamliners, with an order for 39 airplanes with options for an additional 10.

Altogether it would be 78 orders and 43 options, or up to 121 Dreamliners. When finalised, these orders in total will be worth tens of billions of dollars at list prices.

How do you see the emergence of the new airline in Saudi Arabia changing the Middle East travel market?

The Middle East’s role as a global aviation hub continues to be important for developing markets including Southeast Asia, China and Africa. The region is positioned to capitalise on recovery of regional and international travel and cargo demand.

The region will require 3,000 new airplanes by 2041. Middle Eastern operators are forecast to more than double their air traffic, and growth will more than double or triple to most of the world’s regions. The region also has the highest widebody aircraft share of total fleet among the world’s regions and that trend will continue.

IATA in a new report said total traffic in January 2023 (measured in RPKs) rose 67 per cent compared to January 2022. Globally, traffic is now at 84.2 per cent of January 2019 levels. How do you see the trend in 2023?

Air travel is returning, our customers are investing in their fleets, and we’re doing everything we can to meet that demand. The recovery in air traffic has room to run, even in a weaker economic environment, and we see strong demand across our markets.

We expect passenger traffic to grow annually by 4 per cent through to 2041, and as a result, the region will continue to require a versatile fleet that meets the demands of airline and air cargo business models. Middle East airlines will require 2,980 new airplanes in the next 20 years.

What kind of delays are you facing because of the labour shortages and unsteady supply chains right now?

We continue to make important strides in our performance as we drive stability through our operations and the supply chain. That said, supply chain constraints continue, and we expect it to take time for the full supply chain to return to stability. We are actively mitigating risks to ensure we can meet our commitments.

To support the supply chain, we’ve increased onsite presence at suppliers, expanded our digital inventory tracking tools, created teams of experts to manage work movement and address common industry-wide shortages, ramped up internal fabrication for surge capacity and increased inventory of select parts and components for risk protection.

We grew Boeing’s global workforce by about 15,000 in 2022 to 156,000 employees, driven by significant hiring in engineering and manufacturing. In 2023, Boeing intends to hire about 10,000 employees.

Delays in the 737, 777X and 787 programmes led to cancellations in 2022. There are also reports of software issues plaguing MAX deliveries. Recently, Boeing temporarily halted deliveries of 787 Dreamliners over fuselage issues. How do you see this situation playing out in 2023?

We have completed the necessary analysis that confirms the airplane continues to meet all relevant requirements and does not require production or fleet action. The US FAA will determine when 787 ticketing and deliveries resume, and we are working with our customers on delivery timing.

Boeing has made meaningful changes to strengthen our safety practices and culture, and bring lasting improvements to aerospace safety.

The last Boeing 747 rolled out of the factory earlier this year after. Is there another in the Boeing portfolio that can take the baton for five decades like the 747 did?

The commercial aviation market has demonstrated a clear preference for twin-engine airplanes. As a result, we have completed 747 production and continue to invest in our market-leading twin-engine aircraft family.

But Boeing 747 airplanes will be flying for decades to come, and we’ll continue to support 747 operations and sustainment.

Boeing and Emirates recently tested 100 per cent sustainable aviation fuel on one engine of a 777-300ER. How will this partnership be taken forward? Will Boeing carry out similar tests with other airlines in the region?

Boeing previously worked with Etihad Airways for the 2020 ecoDemonstrator Programme, which included a flight in 2020 using 50/50 blend of sustainable and traditional jet fuel. The 2022 ecoDemonstrator program tested about 30 sustainable technologies on a Boeing-owned 777-200ER, flying on a 30/70 blend of SAF and conventional jet fuel. The ecoDemonstrator Program has tested about 230 projects on nine platforms in the past decade.

How much time do you anticipate it will take global airlines to fully transition to SAF?

Sustainable fuels are key to long-term, large-scale CO2 emissions reductions that airplane technology cannot achieve, and offer the best potential to significantly reduce emissions on larger, longer-range airplanes for the next several decades. Sustainably produced jet fuel reduces CO2 emissions by as much as 80 per cent on a gallon for gallon basis. We have committed that our commercial airplanes will be capable and certified to fly on 100 per cent SAF by 2030.

What steps has Boeing taken to reduce its carbon footprint?

Boeing has a multi-faceted strategy based on continued innovation in future airplane technology, deployment of modernised air traffic management infrastructure, and the scale-up of production and use of sustainable aviation fuel. Since 2003, we have invested $60 billion in new technologies to improve efficiency.