Karim Sahib | AFP | Getty Images
DUBAI, United Arab Emirates – Dubai’s final international air show in November 2019 feels like a different era.
Just months before the Covid-19 pandemic turned travel on its head, the well-attended biennial aviation event celebrated an industry that looks very different today.
But almost two years after the travel and aviation industries nearly came to a standstill, the market is picking up again.
The 2021 Dubai Air Show starts on Sunday November 14th. What to expect:
Travel Industry Recovery?
With the continued successful rollout of vaccination campaigns and the easing of governments’ Covid restrictions, the situation for travel has improved.
“Executives are cautiously optimistic about the future,” wrote the aviation analysts of the consulting firm Accenture in a message before the fair.
The company predicts global commercial aerospace growth of 13% year-over-year in 2022, although the year will still be 4% below 2019 levels.
Dubai’s flagship airline, Emirates Airline – the Middle East’s largest airline and largest aircraft buyer – has enjoyed some of that rebound for itself, reducing its previous losses with an 86% revenue increase for its half-year results for fiscal year 2021-2022.
Nevertheless, concerns about possible new Covid variants, inflation and rising energy prices leave considerable uncertainty for the industry. The Dubai show is sure to have a lot of discussion about the recovery of the industry as well as how aviation has become safer and more hygienic due to the pandemic.
Partly because of this uncertainty and also because Dubai is hosting a smaller air show than the Paris or Farnborough events, analysts are not expecting many large orders this year. This is also because Gulf airlines’ order books “tend to be more focused on wide-body aircraft,” said Sheila Kahyaoglu, aerospace and defense analyst at Jefferies. “So I think international traffic is slower. I just don’t think this will be a catalyst for more orders.”
Supply chain problems
The global supply chain crisis has affected many sectors, and aerospace was no exception.
In aviation, supply chain bottlenecks hit defense primarily, Kahyaoglu said. “In communication systems, ships, semiconductor parts – wherever it affects the rest of the world.”
In the business jet segment, the impact is less, as fewer private jets are made per year than other types of aircraft, but there is still “a bit of a parts shortage so the OEMs” [original equipment manufacturers] need to be aware of their material purchases, “said Kahyaoglu.
More than half of aerospace executives – 55% – “showed less confidence in the punctuality and quality of their supply chain over the next six months,” said Accenture.
Only one air transport segment has exceeded 2019 levels and that is freight.
People may long have stopped traveling, but e-commerce and the movement of goods have continued to increase. Before the pandemic, a significant volume of cargo was carried in the belly of passenger planes. But after those planes went offline due to increasing travel restrictions, says Richard Aboulafia, vice president of analysis at Teal Group, “all of a sudden people were like, ‘Hey, we need dedicated cargo planes because this belly cargo is not available.’ “
Expect Airbus and Boeing – the two largest aerospace companies in the world by revenue – to unveil new large freighter versions of existing aircraft, Aboulafia said.
“You will see Airbus talk, maybe even take off, about a freighter version of the A350 XWB jetliner,” he told CNBC.
“And you could see the exact same thing from Boeing with the freighter version of the 777X, the newest version of the 777 that has compound wings and the like. That’ll be really interesting to see because the Gulf is a pretty big cargo.” Market.”
In fact, in Emirates Airline’s most recent half-year results, cargo operations were robust, rising 39%, bringing the business to 90% of the volume it was in 2019.
On defense terms, vigilance continues to see progress on the sale of the Lockheed Martin F-35 II Joint Strike to the UAE, penned on the last day of the Trump administration. The gigantic $ 23 billion sale, which consists mostly of 50 F-35 jets and at least 18 armed drones, is reportedly still under negotiation between Washington and Abu Dhabi.
Previously, U.S. laws and export regulations prevented it from selling deadly drones or the F-35 to any of its Arab allies. But the changes introduced by the Trump administration made this possible, which means that when it is completed it would be the first sale of the F-35 and US-made armed drones to an Arab country.
There is also a “general trend towards the continuous modernization of combat fleets, mostly modernized fourth-generation platforms,” said Justin Bronk, research fellow in air force and technology at the Royal United Services Institute in London.
The fourth generation generally refers to jet fighter jets in service from the 1980s to the present day, with multi-combat roles and more advanced technology than their predecessors, such as infrared search and tracking and digital avionics.