Le Bourget: Competition on both sides

The renowned French air show witnesses fierce competition this year, not only among aircraft manufacturers displaying their products and marketing them, but among client airlines competing to prepare for an expected air travel and cargo boom in the coming years.

From the very beginning, the media has been highlighting the impact of the political rift across the Atlantic on the American participation at the Le Bourget air show. Since the French were heading the opposition to the Anglo-American war on Iraq, they had to be economically punished. Their participation in the air show was downscaled, but for good as they avoided the embarrassment resulting from their aviation industry giant, Boeing, losing ground to its main European rival, Airbus, for the first time in 25 years.

But it's not the competition between Boeing and Airbus that dominates the event and is of interest us — there's the competition between clients to buy as many airplanes, catch the limelight signing big deals.

Dubai-based Emirates was the star again in less than two years, ignoring the negative impact of global developments in the travel market. In November 2001, Emirates shocked the world by announcing one of the biggest deals in the sector, ordering new airplanes worth $15 billion just weeks after the September 11 attacks on New York and Washington that almost led to a halt in world air travel. That deal was relatively divided between the two giants, but this week, Airbus got the lion's share of the Emirates order.

From among about 70 new airplanes, 40 are Airbus, to be delivered in a decade in a deal worth more than $12 billion, while the Boeing share is just over $3 billion. Most of the Boeings for Emirates will be leased (24) from major leasers like ILFC and GECAS, leaving orders to buy just four planes.

Qatar Airways is bound to order more than 20 aircraft, more than half Airbus and around ten Boeing. This will be the first order for Boeing planes by the Qatar flag carrier, all its fleet of 24 airplanes being Airbus. This expected order is not going to bring cheer to Boeing, with Airbus already surpassing it in orders and deliveries this year.

Airbus is sure to achieve its delivery target this year of 300 aircraft (previously estimated at 175), securing orders for 197 with 116 for the jumbo jet A380. Boeing secured only 36 orders so far, with expected delivery this year of 280.

Feeling the loss of ground in a booming region, Boeing created a new job this week of a vice-president for the Middle East, appointing an ex-American ambassador in Muscat to the job. Traditionally, Boeing adopts a marketing strategy based on Washington's political influence on the targeted countries, while Airbus — with a French flavour — adopts the strategy of hefty commissions to key figures.

All these figures and sums are in anticipation of a turnaround in the world travel markets after a severe slump due to SARS, Iraq, Afghanistan, September 11 … The industry suffered $30 billion in losses since the end of 2001, and is expected to add $10 billion of losses this year.

But the prospect for recovery in the coming years is cautiously promising. Airline spending on maintenance, training, support, upgrade and development is expected to more than double in two decades with the aviation service market reaching $5.2 trillion, and the world fleet to more than double, reaching 34,000 by 2022.

Growth of air traffic is expected to go back to normal growth rates by next year, reaching around 5 per cent. Competition between manufacturers, service providers and support industries is going to be fierce with companies seeking support of governments of countries in which they're bound to create thousands of jobs.

The Gulf market is a fast growing target with Qatar airways trying to take a part of the long-haul air transport market share in the region from the established leader Emirates.

Gulf Air is undergoing a restructuring to re-vitalise, and Saudi Arabia is loosening control on its airlines. Dubai airport is being refurbished to handle 61 million passengers by 2012, from 16.3 million last year.

Doha Airport is expanded to raise capacity from 3.5 million to 6 million. Qatar Airways, that carried 2.5 million passengers last year, is looking forward to double the number, while Emirates' targets raising passenger numbers from 8.5 million to 29 million.

Regional airlines in the Gulf are trying to grab the transit travel between Europe and Asia, with Dubai and Doha replacing Hong Kong and Singapore. There is still a fear of a dumping effect, with other regional carriers competing for a shrinking share of the market.


The writer is an Arab writer based in Qatar.