An hour’s drive from Dubai on a sand-swept road lined with waste-disposal facilities and aluminum smelters, the fate of global aviation is being decided.

Boeing Co. and Airbus SAS executives flocked to the new site of the Dubai Air Show for business on an unprecedented scale from the three largest Middle East airlines on the first day, breaking records in the process. Boeing secured $101.5 billion in transactions for its biggest-ever deal by value, while Airbus pulled in its largest super-jumbo order yet.

The two manufacturers rely increasingly on the repeat buying sprees of Emirates, Qatar Airways Ltd. and Etihad Airways PJSC to keep factories humming along. Boeing now has 86 percent of the backlog for its new 777X wide-body with Persian Gulf carriers, and Emirates makes up more than half of total bookings of the A380, tipping the balance in global aviation toward the Middle East at the expense of Western carriers.

“This traffic is coming right from others and reduces the need for jets at the likes of Lufthansa, Qantas, British Airways and Air France,” said Richard Aboulafia, vice president of the Teal Group in Fairfax, Virginia.

Emirates set the tone with $75.6 billion in purchases, while low-cost unit FlyDubai added 111 Boeing 737 single-aisle jets valued at a $8.77 billion. Etihad ordered 25 777Xs and 30 787-10 Dreamliners from Boeing, along with 50 Airbus A350s and 36 A320neo single-aisle at a combined $45 billion, while Qatar spent $21.7 billion on 50 777X jets and 13 Airbus A330-200 freighters. There was no purchase from outside the Middle East.

No Slowdown

Emirates said it needs the planes to sustain growth of 18 percent or more. Without a sizeable domestic market for travelers, Emirates and its regional rivals rely on feeder traffic to push millions of passengers through their hubs and on to global routes that connect most destinations with a single stop in the Middle East.

“We’re in a global recession and we’re still growing at 20 percent,” Emirates President Tim Clark said. “As we can see the market responding to what we do on a global basis, there is no cap yet that we can see.”

Besides the backing from their governments, the carriers are prepared to embrace new technology and aircraft designs. Etihad is now the largest buyer for the Boeing 787 Dreamliner, even as current users of the Chicago-based manufacturer’s most advanced jet struggle with its reliability.

New Technologies

The Abu Dhabi flag carrier is also the launch customer for a new regional version of the Airbus A350-900 to service high demand on some shorter routes. Qatar Airways Chief Executive Officer Akbar Al Baker said he’d commit to an ever longer variant than the A350-1000, the largest version Airbus is selling.

Three of the four first customers for the 777X are from the Middle East, with Deutsche Lufthansa AG so far the only exception for a combined 259 orders and commitments. At a time when Emirates adds more A380 superjumbos to its fleet, the double-decker aircraft falls out of favor with some western customers, including Lufthansa, which is dropping orders.

The Middle East carriers are poised to continue their run, said Boeing Sales Chief John Wojick. The orders placed yesterday are sustainable, he said, since a large chunk of the 777X bought replace existing versions of the twin wide-body.

“These carriers have proven they can operate fleets of this size,” he said.

Desert Outpost

Dubai is holding this year’s air show at the new Al Maktoum airport, a speck in the desert halfway between the glittering skyscrapers of Dubai and neighboring Abu Dhabi that will eventually replace the existing airfield as the main hub. Such bold projects contrast with the complexities that limit expanding airports in the western world. Frankfurt’s growth is being hindered by night-flight curfews, while London Heathrow suffers from a lack of runways.

Emirates has become accustomed to wielding its clout, demanding Airbus and Boeing manufacture aircraft for its specific requirements, such as operating in hot climate. Qatar’s Al Baker has been known to taunt the planemakers for their perceived defects, accusing Airbus at the last air show of being incapable of building a good long-range aircraft.

One of the biggest constraints for the region’s carriers has been winning traffic rights to allow unfettered growth. Germany, from where Airbus delivers its A380s to the Middle East, is among the countries keeping a lid on the expansion of Persian Gulf carriers, with Emirates so far lobbying in vain to fly to the capital city of Berlin with the superjumbo.

“Countries should really open up to other airlines,” Emirates Chairman and Chief Executive Officer Sheikh Ahmed bin Saeed Al Maktoum said in an interview. “If they don’t allow us in, they can take their airplanes back.”

(Source: Bloomberg)