Home' Trinidad and Tobago Guardian : November 28th 2013 Contents NOVEMBER 2013 • WEEK FOUR www.guardian.co.tt BUSINESS GUARDIAN
THE ECONOMIST | BG25
The new venue for Dubai s international air show, which
opened on November 17, is yet another testament to the ambi-
tions of the tiny Gulf state. when fully operational in 2027,
al-Maktoum airport will handle 160 million passengers a year
on five runways. It will operate in tandem with Dubai s older
airport, which is closer to its center and currently welcomes
60 million travellers a year.
The emirate s bet on continued growth in demand also is
reflected in the big orders for new planes that the region s
airlines announced at this week s show. Emirates, Dubai s flag-
carrier, led the way by ordering 150 of the 777X, a forthcoming
revamp of what is currently Boeing s best-selling long-haul
plane. The deal is worth US$76 billion at list prices.
Boeing also landed orders for 75 more 777Xs from the two
other fast-growing "superconnectors" in the Gulf region, Qatar
Airways and Abu Dhabi s Etihad. Boeing s archrival, Airbus,
won Emirates endorsement of another big bet in aviation
when the airline ordered 50 more of the A380, a super-jumbo
launched in 2007 in the hope that carriers would want a plane
even bigger than Boeing s aging 747.
Orders for the giants have stalled in recent years, however,
even as demand for smaller jetliners has hit new highs. In
2011 and 2012 there were slightly more than 50 orders for the
biggest jets, mostly A380s, which typically carry 525 passengers,
and a trickle for Boeing s latest version of its jumbo, which
seats 467. Until now there had been no firm orders this year.
Emirates has 38 A380s in service and is seeking 100 more,
accounting for half the entire market so far.
Emirates enthusiasm aside, views on the A380 s prospects
are divided. Some analysts see it as suitable for only a few
airlines on a handful of routes. Others see it as the best solution
to the expected huge increase in passengers flying between
the most congested hubs. Boeing, whose 777X will seat between
350 and 400, not surprisingly sides with the doubters, reckoning
that there will be demand for only 700 or so planes with
400-plus seats in the next two decades. Airbus reckons on
double that amount.
The more pessimistic pundits maintain that the European
firm will sell no more than 300 of its behemoth. Orders for
the 747 are unlikely to revive.
The doubters say that the main benefit of the A380 s size,
its lower cost per passenger mile, is overstated: Passengers
want frequent departures at main hubs and direct flights
between smaller airports, both of which require large fleets
of mid-sized planes, not small fleets of giant ones.
Perhaps only the Gulf s three superconnectors, linking the
most popular destinations in Europe and Asia via their home
hubs, will want big fleets of A380s. Air France, British Airways
and Lufthansa already have ordered as many as they will need
for the foreseeable future, reckons Rob Morris of Ascend, a
consultancy. They will fly them from airports with scarce
takeoff slots, on a few busy routes for which departure times
are restricted by the need to arrive at a reasonable hour.
Emirates could have a further reason to buy so many A380s.
Andrew Charlton of Aviation Advocacy, another consultancy,
thinks that its big order may give Emirates influence on the
design of future Airbus planes, such as its forthcoming A350-
1000, a 369-seat rival to the 777X. Emirates wants its range
to be even longer than is currently planned, since it is a long
way from Dubai to America. It would also like to see a few
Accusations that the A380 is a niche product rankle with
Mark Lipides, boss of Doric Lease Crop, an aircraft-leasing
firm which has 22 of the super-jumbos and plans to order 20
more. He insists that, if worldwide air travel keeps growing
by five per cent a year, as several forecasters expect, and if
main hubs get ever more congested and fuel stays expensive,
airlines will surely come to see the wisdom of choosing the
biggest plane their money can buy.
Airbus is sticking to its target of breaking even in 2015 on
a plane thought to have cost it $15 billion to develop, but so
far this looks optimistic. It is not impossible that it will turn
a profit one day, however. Sandy Morris of Jeffery s, a bank,
points out that the peak year for orders of the 747 came nearly
25 years after it first took to the skies. Airbus A330 took 15
years to hit the heights and had no orders in 1994, six years
after its launch.
Until an airline other than Emirates starts to order the A380
in significant quantities, however, it will be hard to make the
case that it is a soaring success.
@2013 Economist Newspaper Ltd. (Distributed by the New York
The big, big trends in airplanes
Links Archive November 27th 2013 November 29th 2013 Navigation Previous Page Next Page