A quiet Dubai Airshow despite the $18bn Boeing 777 order from Emirates

The long shadow of the eurozone crisis has fallen over the Dubai Airshow this year with an absence of big orders with the honourable exception of Emirates’ $18 billion order for another 50 Boeing 777s.

Such orders are roll-ups of future orders and the time horizon for deliveries is generally very long. Take the order for 22 A380s placed by Emirates a decade ago: even today only 18 are actually flying albeit the order book has grown to 90 planes.

787 Dreamliner

Down on the ground the Dubai Airshow is a bit thin on visitors this year. The Boeing 787 Dreamliner is the plane everbody wants to see. Otherwise the business jets with ‘for sale’ signs and hostesses hovering at their landing steps look a tad desperate.

Financing is the nasty word that nobody wants to mention. If the eurozone banking crisis develops into a credit crunch as many believe then it will be big ticket items like aircraft that find financing tough.

What will that mean for paying for planes already on order, let alone new orders? It was noticeable that FlyDubai’s main announcement today was not for new aircraft but that it had secured financing for two more to bring its fleet up to 23 by the end of next February.

Financing challenge

Is financing going to be an issue for Emirates as it expands its fleet going forward? Well with that many new planes on order it is clearly going to be a major challenge. Then again Emirates has many local funding options that do not rely on the European banks for support.

However, money is probably going to get more expensive. That is after all what is happening in the eurozone today with Italian bond yields north of seven per cent.

Paying more for aircraft finance of course affects the economics of operating an airline and will put upward pressure on costs. Qatar Airways CEO Akbar Al Baker is talking about a difficult 24-36 months for global airlines and there was little confidence in the air at the Dubai Airshow this year.