- Nearly two years after the travel and airline industry nearly came to a standstill, the market is picking up momentum again.
- The Dubai show is seeing a lot of discussion on the recovery of the industry, as well as the ways aviation has become safer and cleaner due to the pandemic.
- Supply chain challenges, cargo and sustainability will all be themes at this year’s air show.
DUBAI, United Arab Emirates – Dubai’s last international air show in November of 2019, seems like another era.
Just months before the COVID-19 pandemic turned travel upside down, the highly-attended biennial aviation event celebrated an industry that looks very different today.
But nearly two years after the travel and airline industry nearly came to a standstill, the market is gathering momentum again.
The 2021 Dubai Air Show begins on Sunday, 14 November. Here’s a look at what to expect:
With the continued successful rollout of vaccination campaigns and governments easing of COVID restrictions, things are looking up for travel.
“Executives remain cautiously optimistic about the future,” aviation analysts at consultancy Accenture wrote in a note before the show.
The firm forecasts 13% year-on-year growth in 2022 for commercial aerospace globally, although the year will still be 4% below 2019 levels.
Dubai Major carrier Emirates Airline – the Middle East’s largest airline and biggest aircraft buyer – has enjoyed some of that recovery, turning its previous losses into revenue for its half-yearly earnings for the 2021-2022 fiscal year. with an increase of 86%.
Nevertheless, concerns about possible new COVID variants, inflation and rising energy prices leave a significant amount of uncertainty for the industry. The Dubai show is seeing a lot of discussion on the recovery of the industry, as well as the ways aviation has become safer and cleaner due to the pandemic.
Because of that uncertainty and also because Dubai hosts a smaller air show than events in Paris or Farnborough, analysts don’t expect to see many large orders this year. That’s also because order books for Gulf carriers “are more broadly focused,” said Sheila Kahyoglu, aerospace and defense analyst at Jefferies. “So I think international traffic is slowing down, I don’t think it will be a catalyst for more orders.”
The global supply chain crisis has affected many sectors, and aerospace is no exception.
Kahayoglu said that within aviation, supply chain constraints are mostly affecting the defense sector. “In communication systems, ships, semiconductor parts – wherever it is hitting the rest of the world.”
In the business jet segment, there is less impact as fewer private jets are manufactured per year than other types of aircraft, but it still creates “slight shortages on parts, so OEMs”. [original equipment manufacturers] Will have to take cognizance of their material purchases,” Kahyoglu said.
According to Accenture, more than half of aerospace executives — 55% — expressed “less confidence in the timeliness and quality of their supply chains over the next six months.”
Only one air traffic segment has moved above 2019 levels, and that is cargo.
People may have stopped traveling for a long period, but e-commerce and movement of products continues to grow. Before the pandemic, passenger planes carried a significant amount of cargo in the belly. But after those planes went offline the travel restrictions increased, says Richard Aboulafia, vice president of analysis at Teal Group, “All of a sudden people said, ‘Hey, we need dedicated cargo jets because that belly cargo isn’t available.’ ,
Aboulafia said Airbus and Boeing, the world’s two largest aerospace companies by revenue, are expected to showcase new large-cargo versions of existing aircraft.
“You’ll see Airbus talking about, maybe even launching a cargo version of the A350 XWB jetliner,” he told CNBC.
“And you can see exactly the same thing with the cargo version of the 777X from Boeing, the latest version of the 777, which has composite wings and such. It’ll be really interesting to see because the Gulf is a pretty big cargo market.”
In fact, in Emirates Airline’s latest half-year earnings, cargo operations were strong, seeing 39% growth and bringing business to 90% volume in 2019.
In terms of defence, eyes will still be on whether there will be any progress in the sale of the Lockheed Martin F-35 II joint strike fighter jet to the United Arab Emirates in the final day of the Trump administration. The massive $23 billion sale, which mainly includes 50 F-35 jets and at least 18 armed drones, is still under negotiation between Washington and Abu Dhabi.
Previously, US laws and export regulations prevented it from selling lethal drones or F-35s to any of its Arab allies. But changes implemented by the Trump administration have made it possible, meaning that if completed, it would be the first sale of F-35s and US-made armed drones to any Arab country.
“There is a general trend toward continued modernization of the fighter fleet, mostly modern fourth-generation platforms,” said Justin Bronk, Research Fellow for Airpower and Technology at the Royal United Services Institute in London.
Fourth generation broadly refers to fighter jets in service from the 1980s to now, with multi-combat roles and more advanced technology than their predecessors, such as infrared search and track capabilities and digital avionics.