Dubai winds down after $23 bln slugfest
Wed Nov 23, 2005
By Jason Neely, European Aerospace & Airlines Correspondent
DUBAI (Reuters) - If surging sales were meant to take some of the sting out of the Airbus-Boeing rivalry, someone's forgotten to tell both of the world's biggest planemakers.
On Wednesday, a record-breaking Dubai Air Show was beginning to wind down after a breathtaking four days in which the two slugged it out like heavyweight boxers, announcing orders worth around $23 billion and taking swings at each other's marketing strategies.
Both manufacturers see their rival's latest offering as a "paper airplane," meaning an unproven model. Each can tell you how the numbers show their plane is cheaper to operate and the better buy.
Executives at Airbus (EAD.PA: Quote, Profile, Research) say they can catch up with Boeing in orders this year, despite trailing by more than 200 with about five weeks to go.
Their counterparts at Boeing Co. (BA.N: Quote, Profile, Research) wonder how Airbus's A350 -- rival to the new Boeing 787 -- is going to sell without cannibalizing demand for the existing A330 and A340 models.
Both sides gave stylish presentations of the planes of tomorrow, one for the A350, for instance, with a vast stretch of empty cabin space in the middle of the plane set aside for a house plant and a lobster buffet.
Aerospace executives will pack up on Thursday and set off on sales campaigns that industry officials say include potentially huge deals involving Qatar Airways, Australia's Qantas Airways Ltd. (QAN.AX: Quote, Profile, Research), Hong Kong's Cathay Pacific Airways Ltd. (0293.HK: Quote, Profile, Research) and Singapore Airlines Ltd. (SIAL.SI: Quote, Profile, Research).
At over 1,200 plane orders combined, Boeing and Airbus are already in record territory this year and industry officials say a stack of others could be announced before the end of the year.
"There's a few reasons why all this is happening," Scott Carson, vice president for sales at Boeing Commercial Airplanes, told Reuters. "There was a return to health for airlines as traffic came back. We've seen India and China become high-growth markets while the Middle East has stayed very high as well."
He noted that planemakers have been selling planes in the United States this year as well, a market that has been quiet since 2001.
"We suspect there's more to come there too," Carson said. "Airlines trying to get back to profitability are going to have to move to new, more fuel-efficient aircraft."
Dubai-based Emirates ordered a massive $9.7 billion worth of Boeing 777 planes this week, underscoring the plane's appeal as a fuel-efficient twin-engine model that can fly the distances of large, four-engine jets.
Industry officials are watching Emirates's next move closely, with expectations that there could be a deal for 50 of the newest passenger planes -- the Boeing 787 or the Airbus A350.
A deal that size would be worth about $8 billion at list prices and has both sides marketing at full speed as 2005 winds down. Dubai is the last major air show in the 2005 calendar.
Developing a new model takes about five years and can cost more than $10 billion, so both sides fight feverishly to line up the necessary buyers.
Boeing Co. Chief Executive James McNerney told Arab Gulf media this week that the competition between the Boeing 787 due in 2008 versus the A350 due two years later was pivotal.
"I see the 787-A350 as the next battleground for us as most of the orders would come from this segment," he said.
Neither manufacturer has secured the Emirates order at Dubai, where some analysts thought an announcement was likely, making it a key campaign as they head into the end of the year.
(Additional reporting by Heba Kandil)
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