AIRSHOW PREVIEW Aviation companies expect subdued orders at air show.

Byline: Jane FergusonBusiness Features Writer

Dubai The 2009 Dubai Air Show which opens on Sunday is likely to reflect the impact of the global economic crisis, when compared with its predecessor. With $155 billion (Dh569 billion) in orders, the 2007 edition of the show was always going to be a tough act to follow.

The value of orders at the event peaked in 2007, said show director Alison Weller. Although times have improved in the past 12 months, she is not confident of nearing the figure.

"We go into this with a bit more hope than we were anticipating a year ago," said Weller. "I think it would be unlikely we will top that."

Both Boeing and Airbus have said they are not expecting large announcements this year. Airbus has instead signed deals which it will hold off announcing until the event rather than go without any announcements this year.

"To be honest, we are expecting some firm sales to be announced, but let's be clear, it's not going to happen during the show," said Habib Fekih, president of Airbus Middle East.

Two deals were signed and a third is being finalised, he said, involving 20 to 25 commercial craft in total and the show will provide a "stage" for the announcement of the deals. Some of the customers involved are newcomers to Airbus, which Fekih says makes them strategic partners.

Interest growing

Although Boeing is not more optimistic about major orders, they said they weren't stockpiling any for the show.

"We don't operate that way," said Marty Bentrott, senior vice-president of sales in the Middle East, Central Asia and India. "We don't save up orders to announce at the show."

The region's low-cost carriers remain, however, an important segment for plane manufacturers and this year's event is likely to see a drive for stronger ties amongst companies.

However, low-cost carriers, recently heralded as saviours of an otherwise slowing industry, are unlikely to replace major airlines in the headlines with large orders, said industry bosses.

The problem with the announcements, said Fekih, is that a lot of low-cost carriers announced big orders in 2008 so expectations of additional purchases this year are low.

Last year Dubai-based flydubai ordered 50 of Boeing's latest 737s.

"The strategy to get close to the low-cost carriers is still there," said Fekih. "In the next 20 years low cost will be the same importance to us as traditional airlines."

With the likelihood of no notable orders, those selling planes will be focusing on discussions with their customers looking ahead to the next show in 2011.

Boeing will be looking more to deliveries in the coming months, with the first of Etihad's 100 777s to be handed over in December and the first of 35 787s to follow.

However bleak the forecast for major purchases may seem, interest in the show is still growing, said Weller, with a 10 per cent increase in exhibitors this year.

There will be 900 exhibitors present from 47 countries.

One reason such interest may be satisfied this year, she said, was the increasing interest by aircraft manufacturers and those involved in the industry to increase their partnerships in the region. From huge household names in aircraft manufacturing to industry consultants having partners in the region is good marketing, said Weller.

"It's to show people they're bringing business back to the Middle East," she said. "It can be a very small company that's looking for an agent out here. We get quite a lot of companies asking how they can go about finding local partners."

The reasoning behind such tie-ups is simply down to seeking a firmer presence in an area of the world where the air industry is weathering the storm better than others, she said.

"Whilst the Middle East has certainly shrunk, it's still buying where in other areas it has stopped," said Weller.

The show is, however, 60 per cent commercial and 40 per cent defence, and those in the latter bracket are more upbeat than others this year.

Although massive sales announcements are not confidently expected, those at Boeing Integrated Defence Systems (IDS) say interest from the region in a number of products is encouraging.

Among Boeing IDS's products local governments are interested in, said Jeff Johnson, vice-president of Boeing IDS for Business Development in the Middle East and Africa region, the C17, helicopters such as the Chinook, and Integrated Air and Missile Defence Systems are most popular.

"Anybody who has Chinooks is looking for more, or looking to upgrade," he said.

"We've had countries such as Jordan and GCC countries looking at rotorcraft [helicopters."

The increasing modernisation of GCC defence equipment is a reflection of the growing concept of the aeGulf Shield', he added. The shield is a phrase increasingly being used to describe the growing defence equipment stocks of GCC governments, from helicopters to fighter jets and ships.

Announcements of defence sales, however, are subject to "national security sensitivity", he added, and economics alone may be an inaccurate interpretation of any lack of sales announcements.

Al Nisr Publishing LLC 2009. All rights reserved.

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