DUBAI (Reuters) - Boeing savoured an order worth at least $18 billion
for 50 wide-body 777 jetliners from host airline Emirates as the Dubai Air Show
entered a second day beating the drum for growth despite widespread economic
gloom.
The largest single order by value in Boeing's history boosted the Middle
East's largest industry event and pushed talk of global recession to the
sidelines -- though analysts said getting aircraft financing was proving an
increasing challenge.
Qatar Airways looked set to step in with a possible Boeing order on Monday
and was expected to give its final verdict on a long-awaited Airbus order that
sources said would include A380 superjumbos on Tuesday, but talks appeared to be
continuing.
Sources familiar with the matter said Abu Dhabi's Etihad Airways was ready to
buy an extra 12 Boeings including 10 787 Dreamliners and two more 777s, but may
not announce at the show.
The Gulf's big three are buying wide-body aircraft to serve Asia and the
United States and redraw the world's transport and logistics map with the Gulf
at the center, thanks to its ability to reach most of the world's population in
one long-haul hop.
Kuwaiti lessor Alafco plans to boost an order for 30 Airbus A320neo passenger
aircraft, probably on Monday.
The battle to redirect flows of people and cargo via the Gulf has provoked
sharp exchanges with airlines in Europe. Emirates hit back at charges that it is
flooding the market by pointing to European superjumbos flying into Dubai.
Emirates is the largest customer for the 525-seat Airbus A380 superjumbo with
90 of the world's largest airliner on order and there have been signs it might
buy even more.
"The three big Gulf airlines are attacking other people's traffic. They are
converting oil wealth into an aviation market position," said aerospace analyst
Richard Aboulafia of Virginia-based consultancy Teal Group.
Gulf airlines say they simply operate a better service.
SPEED MACHINES
Airline chiefs played down the risk of contagion from Europe's debt crisis,
but the head of Boeing's commercial division said it was a "watch item" and
Brazil's Embraer trimmed a forecast for business jet deliveries due to the
downturn.
Emirates said it had adequate financing in place for 2012 and planned a mix
of funding options for the latest 777 order, including Islamic finance.
Record sales of the Boeing 777 capped by the Emirates announcement, attended
by the ruler of Dubai, could force Airbus to do another rework of its future
A350, Aboulafia said.
Few if any A350 orders are expected at the show, but sales chief John Leahy
said he felt under no pressure to drum up new sales for the aircraft, whose
development has been delayed.
Sunday's opening day brought a raucous display of speed and power across the
southern Gulf as rival Typhoon and Rafale fighter jets screamed over Dubai and
the airline-sponsored Formula One circuit rolled into neighbouring Abu
Dhabi.
A potential $11 billion order for French jets was thrown into doubt when the
four-nation consortium that builds the Typhoon said it had been invited to give
a sales pitch to military officials of the United Arab Emirates.
The combat jet is supplied by Eurofighter partners Britain, Germany, Italy
and Spain.
France is anxious to win its first Rafale export order but analysts said it
was unclear whether the UAE request signaled a change in requirements or was
merely a tactic to put pressure on manufacturer Dassault Aviation over
Rafale prices.
"They are sending Dassault a signal, that much is certain," an aerospace
industry executive said.
France said it remained in what Defense Minister Gerard Longuet called a late
stage of talks with the UAE on the Rafale.
Analysts say rising geopolitical tensions surrounding Iran in past weeks
could lead to a spike in defense orders.
(Additional reporting by Nadia Saleem, Praveen Menon, Editing by Diane
Craft)
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