Boeing reaped a rich harvest at the recently concluded Dubai Airshow 2023. Among its biggest orders was a US$52 billion agreement for 95 widebody aircraft from Emirates. The carrier is already the world’s largest operator of Boeing 777 aircraft, and it signed further orders for 55 777-9s and 35 777-8s as well as five additional Dreamliners. Another Dubai-based carrier, flydubai, also inked a deal for 30 Boeing 787 Dreamliners worth US$11 billion. Boeing went on to receive confirmed orders for dozens more aircraft at the airshow including 11 787 Dreamliners and 20 737 Max aircraft from Ethiopian Airlines, and orders from SCAT Airlines, Royal Jordanian and Royal Air Maroc too.
“The fact that flydubai and Emirates decided to make big orders demonstrates the resilience of the market, how important new aircraft are to their future, and also the value of Boeing products. This is the culmination of months, and even years in some cases, of working with our customers to figure out what makes the most sense for them and how these aircraft fit in their future fleet needs,” Darren Hulst, vice president, Commercial Marketing at The Boeing Company told Business Traveller along the sidelines of the show.
The Middle East’s aviation sector is booming. Hulst explains that Boeing’s global forecast projects that the Middle East needs about 3,000 new aircraft over the next two decades until 2042. Last March, two major Saudi carriers – the newly launched Riyadh Air, backed by the kingdom’s Public Investment Fund, and Saudia – placed large orders from Boeing. Saudia ordered 39 Boeing 787 Dreamliner aircraft, with an option for another 10, while Riyadh Air agreed to purchase 39 787-9 Dreamliners, with an option to purchase 33 more of the same aircraft.
“In the last three years, globally, we’ve sold just about over 800 widebody jets, primarily 787s and also 777s, and a lot of that has been to customers here in the Middle East. When you look at the backlog for Middle East airlines, 75 per cent of those widebody orders have been for Boeing widebodies. Our goal would be to satisfy the needs of our customers with these versatile jets, either the 787 or the 777. This is an incredibly important region for us to showcase what Boeing widebodies can do,” notes Hulst.
The all-Boeing operator of flydubai, in a dramatic departure from its policy of only inducting narrowbody aircraft, decided to place its first-ever widebody order at the airshow. Emirates only has widebody aircraft in its fleet to date, and Riyadh Air at the time of going to press has stuck to the widebody segment of aircraft. It begs the question of whether widebodies are a more appealing proposition to major carriers from this region as opposed to narrowbody aircraft. Hulst weighs in on the subject. “This region needs more widebody aircraft than other regions because so much of its traffic is focused on connecting big population centres from Asia to Europe, and from Africa to Asia, and so on. That yields a larger mix of widebody aircraft.
“But I also think that as we go into the next decade, with more of a local economy developing in places like Saudi Arabia and the Gulf states, we’re going to see the development of short- and medium-haul traffic, and that will be largely driven by single-aisle aircraft.
“Going forward, Saudi Arabian carriers that are launching, developing and refleeting are also looking for single-aisle aircraft to complement their widebody jets. Our forecast for the long term is that a little bit under half of the aircraft [ordered by] Middle East carrier will be widebodies, and a little bit over half will be single-aisle aircraft.”
The widebody is still going to be a major draw for carriers from the region. Hulst notes that airlines from the Middle East represent about 7 per cent of the demand overall for aircraft, but almost 20 per cent of widebody demand – a figure that can readily rival global markets. “One out of every five big aircraft delivered [globally] will be provided to this market. This region is therefore on par with the widebody segment within North America and Europe. This region will take on the same level of importance [as other global markets] for some of our programmes – the 777X is a great example.”
Among the first eight global customers to express their interest in the 777X, three – Emirates, Qatar Airways and Etihad Airways – were from the Middle East. Emirates’ most recent order at the Dubai Airshow 2023 takes its 777X order book to a total of 205 aircraft. The incoming 777-9s and 777-8s will replace its retiring 777 aircraft. “The 777X is the largest twin-engine widebody aircraft ever. For airlines that currently operate the 777-300ER, it’s going to increase their capacity by around 20-40 seats and offer the lowest cost per seat of any widebody in history.
“Today, about a quarter of global widebody seats are on aircraft with 340 seats and more. So, there’s a sizeable replacement demand in that space for aircraft that are efficient, but also large. That’s where the 777X fits into the market – when you need capacity, but you have limitations on frequency, and also when you need an efficient replacement for ageing fleets,” says Hulst.
While Boeing walked away from the Dubai Airshow with orders for hundreds of new aircraft, the pressure is now on it to deliver them as per the agreed timelines. That may prove a challenge though given that the pandemic blew a gaping hole through the supply chains of nearly every major industry, with the aviation sector which typically relies on a number of external component manufacturers to support its operations, particularly affected. Apart from affecting physical production levels, the pandemic also saw skilled personnel exit from the industry. “The pandemic rippled through the whole industry. Not only did it take a production rate that was used to producing at a high rate and bring it down to very little, but you also saw a significant attrition of skills and capabilities where the most accomplished and experienced workers in many cases took retirement packages and left from the industry.
“Now, we need to rebuild that talent and rescale every single part of that supply chain, otherwise you can’t achieve the production rates that you need to,” says Hulst, while admitting that the going hasn’t been easy while striving to achieve those goals. “It’s been challenging for us and frustrating for our customers because we haven’t been able to do it as fast as we all thought we could. In some cases, we’ve even embedded our own employees with our key suppliers to stabilise production and to help them focus on where they need to be for us to achieve not just the current rate of production, but also for us to meet the future needs of our production goals.”
Hulst says that at present Boeing is continuing to raise the production rates on its single-aisle 737 aircraft – they’re currently manufacturing around 38 of them each month. He added that Boeing is also adding an assembly line in Everett to supplement the current assembly line in Renton.
Over at its facility in Charleston, Boeing is producing nearly five 787s each month. “The 787 production rate before the pandemic was 14 per month. If you look at where the market is going, I think before the end of this decade, we’re going to be in that neighbourhood because of demand in the market.”
As Boeing increases production, it’s also laying a greater emphasis on sustainability. Hulst says that each new aircraft that it brings to market is around 20-40 per cent more efficient than the one it is replacing. It has also undertaken supplementary activities such as purchasing 5 million gallons of sustainable aviation fuel for use in its test flights and for customer delivery flights. “The real kind of critical work we’re investing in has to do with scaling sustainable aviation – it sounds boring, but it is critical. We can’t get there by producing a hydrogen jet in 2050. We can’t get there by replacing the whole fleet in the next five years. Investments in scaling infrastructure are absolutely our focus in the next five to ten years. We’re looking at future technologies, but maturing a technology that can actually change the way people fly on a commercial aircraft with 100 seats or bigger is still a decade away,” cautions Hulst.
As an example of Boeing’s commitment to sustainable aviation, he cites its US$450 million investment into all-electric autonomous air taxi developer, Wisk, in January 2022 which will be able to transport four-five passengers.
Other forward-looking technologies that Boeing is currently considering include the Sustainable Flight Demonstrator Project in partnership with NASA to explore airframe technologies, specifically new wing designs, that can make their way onto single-aisle commercial aircraft. “We’re looking at Truss-Braced wing technology that could dramatically impact the efficiency of a single-aisle aircraft. [We’re also looking at] advanced propulsion technologies that are mostly in the hands of our engine suppliers, but need to be integrated into an aircraft’s design. And then finally, we have production systems. For us to make airplanes more inexpensive, but also more quickly, a production system revolution will be a part of what brings a new aircraft to market. Right now, we’re investing in all those angles,” says Hulst.
The Middle East has already proved to be a ready and willing market for Boeing products, and as new technology emerges and debuts in next-generation aircraft, this region will likely also be among the early customers of those aircraft.
The UAE and Saudi Arabia, two of the biggest markets in this region, have much potential to further develop their aviation ecosystems. “The UAE and Saudi Arabia are huge for us. If you look at UAE, you look at a pretty advanced aviation market. You’re looking at a place that has invested in and put together the infrastructure to connect people. In fact, when you think about connecting, you think about a hub like Dubai or Abu Dhabi. In Saudi Arabia, I think it’s just the beginning of the potential. You are seeing what is possible there with the right investment. Saudi Arabia has a religious market. It also has a potential leisure market that hasn’t yet been tapped and it’s got a big domestic market. So if you think of its potential, it’s vast. I think they’re just starting to tap into that growth. And so from my perspective, the UAE market is mature and continuing to develop while the Saudi Arabia market is almost like a developing and emerging market for aviation.” The American manufacturer is letting this region have nothing less than its undivided attention.