Money appears no object for Dubai and its neighbours when it comes to buying aircraft. But to build a sustainable aerospace sector, the Gulf region will need the help of the West's OEMs.
It's a world in which a Saudi royal can fly in on his Boeing 747-400 to commission an even roomier personal transport: the first Airbus A380 private jet. Where a company that did not exist two years ago - Dubai Aerospace Enterprise - feels confident enough to order 200 Airbuses and Boeings at near the peak of the pricing cycle to launch a leasing business despite having no declared customers. A world in which, with the stroke of a pen, an airline based in a statelet with a population of 1.4 million, can make the biggest single airliner deal in history at $35 billion in list prices, and together with Qatar Airways assure the future of a programme - the Airbus A350 XWB - that recently hovered between life and death.
As the rest of the aerospace industry frets about fuel prices, the fallout from the US credit crunch and the prospect of five years of aviation growth running out of steam, there was a sense of the surreal at last week's Dubai air show, set amid the soaring new skyscrapers and construction sites of the Middle East's playground and commercial hub.
Given the seemingly insatiable appetite for new equipment of its airlines, together with VIP charter operators such as Royal Jet (the world's biggest operator of Boeing Business Jets), Dubai and its Gulf neighbours are in a large way responsible for the current boom in the aerospace industry. Now, the region wants to move from being merely a customer of original equipment manufacturers to being a player in the supply chain and aftermarket in its own right.
But, despite its billions, it cannot do that on its own from scratch simply by luring experienced expatriate executives and pilots with promises of low-tax, crime-free, sun-soaked lifestyles as it has with its airlines. To build sophisticated engineering, design and research sectors, it needs to enlist the help of the West's aerospace heavyweights.
That is why at last week's show, there was a procession of big names - Boeing, CAE, General Electric, Lockheed Martin, Northrop Grumman, Thales and SR Technics - signing memoranda of understanding with DAE and its Abu Dhabi counterpart Mubadala to explore joint ventures.
Those with an existing foothold in the region have a marked advantage. Boeing and Lockheed Martin will be hoping to convert their respective involvement with the Saudi Arabian and United Arab Emirates armed forces into civil projects. SR Technics' owners include DAE and Mubadala, so it was an obvious candidate to help transform the Mubadala-owned former Gulf Aircraft Maintenance (Gamco) into Abu Dhabi Aircraft Technologies, centrepiece of that emirate's ambitions in the global maintenance, repair and overhaul sector. CAE's efforts to gear-shift from simulator manufacturer into all-round provider of training packages will be helped by the potential of replicating in other Gulf centres its successful Dubai-based Emirates-CAE Flight Training, where most of its clients are not Emirates pilots but business aviation operators.
As more and more prospectors join this latter-day gold rush, the question few dare to ask is: can it all be sustainable? What would the effect be of a major Islamist terrorist attack on Dubai's image as the anything-goes, safe and prosperous Switzerland of the Middle East - and thus the growth trajectory of Emirates? What happens if the US credit crisis causes a slowdown in Asian economies - the expansion of which is driving much Gulf-based cargo traffic? Despite all the new airlines emerging the wider region, are there really enough takers for yet another leasing company with a fleet in the hundreds of aircraft? And, if the business is there, why are the likes of GECAS and ILFC not already plugging that gap?
These did not seem to be matters troubling the Dubai air show's big spenders last week, who are so bullish about their market predictions and their abilities to meet them that sceptics seem like wild-eyed prophets in the wilderness. Six years ago, Dubai's rulers were talking up the region's potential at an air show held just weeks after the 9/11 attacks - from which much of a nervous Western aerospace industry stayed away.
In the uncertain world of the time, their vision of a bright tomorrow was dismissed by most industry-watchers as a desert mirage. Last week, DAE, Emirates and a host of smaller operators backed up these promises with yet more hard cash. A grateful Western aerospace industry is hoping the dream does not end.
Source: Flight International