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Demand for jumbo airliners continues to grow

Dec. 2, 2013, Dubai, U.A.E. - The new venue for Dubai's international air show, which opened on Nov. 17, is yet another testament to the ambitions of the tiny Gulf state. When fully operational in 2027, al-Maktoum airport will handle 160 million passengers a year on five runways.


December 2, 2013
By The Associated Press

It will operate in tandem with Dubai's older airport, which is closer
to its centre and currently welcomes 60 million travelers 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 $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
midsized 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 more seats.

 

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.


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