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Airlines

Airbus and Boeing Face Ambitious Expansion Plans from Middle Eastern and Asian Airlines Amid Global Economic Uncertainty

Strategic Insights

— 2 min read

The global aviation industry is experiencing a mix of challenges and opportunities as Asian and Middle Eastern airlines continue to expand their fleets, despite the ongoing global financial crisis. Airbus and Boeing, the two largest aircraft manufacturers, are taking a cautious approach, with Airbus expecting to deliver 483 aircraft this year, equal to last year's output, and potentially up to 500 planes. The airlines' ambition to expand their fleets is driven by growing demand, with the International Air Transport Association reporting that some leading airlines have raised up to $8 billion from global capital markets to finance their operations.

Key Takeaways:

  • The first 20 Airbus A380 superjumbo jets have been delivered, with Qantas of Australia, Singapore Airlines, and Emirates of Dubai as the main buyers.
  • Emirates has an additional 53 A380s on order, which may be "completely disproportionate" to any likely reality, according to Richard Aboulafia, an analyst at Teal Group.
  • Emirates' expansion plans are likely to be adjusted, with the airline possibly converting some of its A380 orders to smaller aircraft like the Airbus A350XWB.
  • The airline's financial situation is precarious, as Abu Dhabi and Qatar, neighbors with significant oil and gas wealth, do not generate capital for Emirates.
  • The combined fleet of Emirates, Etihad Airways, Qatar Airways, and Gulf Air consists of 289 aircraft and has 492 more on order.
  • Airbus and Boeing have 6,915 orders in their backlogs, with Airbus expecting a gradual recovery in deliveries through 2011.
  • European export-credit agencies are likely to finance up to 45% of Airbus' export deliveries this year, up from 22% in 2008.
  • Low-cost carriers, such as Air Arabia, Nas Air, Bahrain Air, and Flydubai, operate in the Gulf region and have been expanding their fleets, but are dwarfed by the region's classic network airlines.

Statistics:

  • Airbus has 483 aircraft to deliver this year, with a potential total of 500 planes.
  • European export-credit agencies are expected to finance up to 45% of export deliveries by Airbus this year.
  • Emirates has 138 aircraft in service, including 5 A380s, and 166 more on order.
  • Etihad Airways operates 48 aircraft and has an additional 111 on order, including 10 A380s and 25 A350XWBs.
  • Qatar Airways has 68 aircraft in service and 158 on order, including 5 A380s and 30 Boeing 787s.
  • Oman Air operates 18 aircraft from its base in Muscat, with 16 orders outstanding, including 6 Boeing 787s.

Sources:

  • Richard Aboulafia, analyst at Teal Group, in an e-mail commentary this month.
  • John Leahy, Airbus's chief commercial aircraft salesman, in a recent statement.
  • International Air Transport Association, recent report on airline traffic and capital markets.
  • Boeing, press release on the 777 model and 787 Dreamliner.
  • Airbus, press release on the A350XWB.
  • Teal Group, report on the aviation industry.
  • Bombardier, press release on the C Series 110- to 145-seat airliners.
  • Embraer, press release on the Phenom 100 and C-390 military transporter.
  • Pratt & Whitney, statement on the new family of turbo fan engines.
  • Air Arabia, press release on expansion and fleet growth.
  • Nas Air, press release on fleet expansion and new routes.
  • Bahrain Air, press release on fleet growth and expansion.

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