The Dubai Air Show kicks off next week, and
Reuters is predictinga “$100 billion Boeing order bonanza” by Middle Eastern carriers like Etihad, Emirates, and Qatar Airways.
Why such high expectations for a region that accounts for just 8% of the world’s revenue passenger miles?
It’s because Middle Eastern airlines are young and growing fast. And unlike other booming regions, they have an appetite for big, expensive aircraft.
In a statement today, Boeing VP of Marketing Randy Tinseth said one key is location:
The Gulf region benefits from a unique geographic position that enables one-stop connectivity between Europe, Africa, Asia and Australasia. Additionally, over the last decade, we’ve seen a rise in low-cost carriers that have benefitted from a large youthful population, large migrant workforce and trends toward market liberalization.
Boeing predicted that “long-range, twin-aisle aeroplanes — such as the Boeing 777 and 787 Dreamliner — will continue to dominate the Middle East’s order books.”
The advantage to selling the wide-body aircraft is clear. In 2013, the most expensive 737 jet ran for $US109.9 million. The cheapest 777 cost more than double that ($261.5 million).
So a region that’s more interested in wide-bodies than narrow-bodies a major opportunity.
To drive home the importance of the Middle East to both Boeing and its archrival Airbus, we’ve pulled a few charts from their most recent market outlook reports.
Lets’ start with the rate of growth in the region, compared to the rest of the world:
The region isn’t on track to be a world leader in traffic, but it’s 20-year growth rate is the world’s highest:
Now let’s look at the Middle East’s taste for large aircraft. It’s the only market that wants more twin-aisle than single-aisle planes.
Boeing has slightly different numbers from Airbus, but it gets to the same point. In the rest of the world, wide-body planes make up just 24% of orders. In the Middle East, that rate is over 50%.
So as the Dubai show kicks off, get ready to see a lot of big orders for big planes come in.
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