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18 July 2024

Airbus expands ME presence and eyes $8bn worth deliveries in 2009

By Nina Varghese

Airbus, which claims more than 50 per cent of the market share in the Middle East, has grown its presence in the region significantly by locating its global corporate jets business in Dubai. It has also set up a logistics centre here, according to a top executive.

"Airbus has outsold Boeing in the corporate jet category, for the past five years and now has 60 per cent market share of single aisle and wide body aircraft. There have been 23 sales of corporate jets," Habib Fekih, President, Airbus Middle East, said.

The regional chief said, as a further show of confidence in the region, Airbus opened a new materials and logistics centre at the Dubai Airport Free Zone in April 2008. The centre, which covers more than 3,700 square metres of floor area, stocks more than 5,000 parts and 43,000 items at any given time for distribution to regional and worldwide destinations.

Besides the Middle East, the Airbus office here covers North Africa and parts of Asia such as Sri Lanka, Pakistan and Afghanistan. Airbus now offers a range of services which include training and technical support, customer relations as well as sales and marketing.

The aircraft manufacturer has forecast the Middle East aviation industry may be cushioned from the worst effects of the downturn because of its young fleet and a likely rise in oil prices in 2009. When asked if Middle East carriers would cut capacity like some North American carriers have done, he said the business model of the Middle East carriers was different from North American airlines, which was built on the hub and spoke model for domestic passengers. Because of its position, Middle East carriers operate from one international airport to another with just one stopover.

Fekih said the Middle East was not immune to the current environment, however, it is better placed than other regions. This region has exhibited double-digit growth rates over the past five years, which was more than what had ben forecast.

Talking about the business for this year, he said Airbus expects aircraft deliveries for Mena this year, valued at $8 billion (Dh29.3bn).

Fekih said: "Airbus has an order backlog (aircraft still to be delivered) of around 665 aircraft valued at $110bn, that is about 18 per cent of the total backlog.

He said 2008 and 2007 were exceptional years for the airline industry. Most of the airlines in the region have placed large orders for aircraft. "If we do 100 (fresh orders) in 2009 we will be happy." Fekih said there were no cancellations of orders.

He said in 2008 a record number of 483 aircraft was delivered, 30 more than those delivered in 2007. This comprised 386 A320 aircraft, 85 A330 and 12 A380.

Airbus will assist its customers to secure finance with advice on market conditions. "We will assist customers to get bridge loans, but we are not involved," he said.