It has been billed as “the most expensive show on earth” and the Dubai Air Show did not disappoint with the equipment on display proving too costly for most attendees. After enjoying a record year in 2007, the tenth edition of the biennial event is feeling the effect of economic reality with many investors keeping their money in their pockets, with few big deals announced this week.
Sales of commercial aircraft at the show were their weakest since 2003. Only 42 planes, worth some $5.6 billion (£3.3 billion), were sold during the week. The only substantial order for commercial airliners was placed by Ethiopian Airlines, which confirmed a $2.9 billion deal with European manufacturer Airbus for 12 long-range A350 XWB aircraft.
Rolls-Royce, one of the few other companies to tie up significant business at the show, will supply engines to power the new Ethiopian planes. In total, the company won contracts worth $2.3 billion, including a $1.5 billion order for Trent 700 engines from Air China.
With some 900 exhibitors this year, organisers had claimed that Dubai now ranks alongside the industry’s leading annual showcase events at Farnborough and Paris. However, with aviation still suffering the effects of the global economic crisis, matching the level of business done in 2007 was not expected.
Two years ago, with the market buoyant and the Gulf region enjoying record levels of growth, orders for commercial aircraft topped $100 billion, led by Dubai’s government-owned carrier, Emirates, which opened the show by announcing orders for 143 new aircraft from Airbus and Boeing worth almost $35 billion.
The two main airliner manufacturers have struggled for sales this year, with many airlines cancelling or deferring orders. Although Boeing forecasts demand for 29,000 aircraft worth $3.2 trillion over the next 20 years, the company warns that most airlines are unlikely to return to profit until 2011, with orders for new aircraft only picking up in 2012.
Tom Enders, president and chief executive of Airbus, conceded that the industry’s difficulties will continue into next year and beyond.
“We all believe that 2010 and 2011 will still be quite challenging, but at this air show it is encouraging to see that there is still growth in the industry, particularly in the Middle East and Africa,” he said, speaking to reporters at the event.
“We are a growth industry, nobody debates that, and we are used to cycles, some deeper and more pronounced than others. If this is the worst economic crisis in generations, obviously we are not surprised that it affects aviation, but we will get through this.”