A holding pattern for the Dubai Airshow


Possibly the least popular man at the Dubai Airshow last week wasn’t even there.

With timing that couldn’t have been worse if he’d planned it deliberately, US Secretary of Defense Ash Carter gave an interview to the Atlantic website, in which he lightly grilled the recent propensity of the Gulf states to buy hugely expensive weapons platforms, such as fighter jets and the like.

“The stuff these guys want isn’t the stuff these guys need,” Carter said, in comments that were published two days before the airshow began. “If you want stuff that protects you — you’re not going to protect the integrity of your own state, you’re not going to protect from infiltration from outside, by having a bunch of fancy equipment.”

Carter’s point was that the GCC nations — with the exception, he said, of the UAE — had invested too heavily on “fancy equipment” instead of dedicating more energy to what he referred to as “the hard business of training and disciplining ground forces and special-operations forces”.

He may have a point. But the legion of American defence contractors that descended on the airshow last week must have felt like they’d been stabbed in the back by their own government. The Middle East as a whole accounts for 32 percent of the US defence exports market, and the top three countries for American arms purchases in fiscal year 2014 were Qatar, Saudi Arabia and Kuwait.

As a result, all the big guns, if you’ll pardon the pun, were at the event, banking on demand remaining strong in growth markets like the Gulf, even as the US cuts back on its own defence spending. From Lockheed Martin to Raytheon, and from Northrop Grumman to Boeing, defence — rather than commercial aircraft sales — took centre stage.

As had been previously flagged, the Gulf airlines were relatively quiet. As Qatar Airways CEO Akbar Al Baker put it: “Buying planes is not like buying groceries in a supermarket”. The fruits of Emirates’ decision to spend $76bn on 150 Boeing 777X aircraft at the last airshow in 2013 will not be seen until at least 2020, when the first jets are expected to be delivered. It is also unlikely to invest any further in Airbus’ A380 programme until the European manufacturer firms up plans to re-engine or stretch the superjumbo.

Meanwhile, Etihad thinks it has enough planes to cover its growth until 2025 and Al Baker also said during the airshow that Qatar Airways had “more than enough” aircraft for the country’s showpiece event, the World Cup in 2022.

With a timeline that long, the lack of aircraft orders is not surprising. So will the Gulf airlines be prepared to spend big in two years’ time? It’s far too soon to say. If the oil price remains low, there may be a temptation to keep older and less efficient jets in service for longer.

One thing does seem clear. Despite efforts being made by new manufacturers such as Russia’s Sukhoi, China’s COMAC and Japanese giant Mitsubishi, Airbus and Boeing still look like they have the world’s commercial jet market locked down for the long-term. Even more established competitors like Bombardier have their own problems — the Canadian firm is now $9bn in debt following the development of its CSeries jet.

Still, with sales crossing the $100bn mark over the course of the Dubai airshow, it certainly will be regarded as a success. By the time 2017 comes round, the organisers will be hoping for more headlines that focus on big-money deals, rather than on aerobatic displays, jetpacks and Katy Perry.

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