The Dubai debacle

Published On: December 2, 2017 12:21 AM NPT By: Hemant Arjyal

It was a bolt from the blue for the Airbus team when the expected orders for the Gulf carrier Emirates fizzled out in public 

The trail of disturbance left on water surface by a ship is known as wake. It is no different in the air; only that it is largely unseen and is complicated due to the combination of speed, wing forms and the shape of the fuselage. The wake is an unwanted by-product that creates drag, hindering forward motion. Any aircraft, howsoever well designed, will not be able to do away with it completely. But empennages like sharklets/winglets have become common features of passenger jets, big or small, as devices that help reduce wingtip “vortices”. 

But this piece is not about wakes. It rather focuses on the recent Dubai Air Show (DAS). What happened in Dubai, regarding the much anticipated orders for A380, was more of a quake than a wake. Big air shows like Farnborough (UK) and one in Paris are held annually, alternating between the two locations. DAS began as a small civil aviation trade show in 1986 and only became a full-fledged air show in 1989. Held in November of every odd numbered year, it is an important event in the region as Dubai happens to be at the core of the Middle East. 

The oil-rich Gulf countries generally want best of everything that money can buy and there is nothing more expensive than a brand new passenger airline or latest fighter or unmanned drone. As for big airlines, negotiation on specific needs regarding capacity and range is protracted and goes far beyond the span of an air show. Announcement about new developments and significant orders are generally timed during air shows to get maximum publicity. 

Airbus shocker 
Air shows generally have large media presence, and the recent DAS had 1,350 journalists covering it. That aside, large number of exhibitors of various gadgets/equipments try their best to push or arouse the interest of serious visitors. Such shows are generally open to public on last couple of days with attractions like aerial acrobatics and fly-pasts. One can gauge the impact of such large media presence in an environment where “breaking news” happens in real. 

As such, it was a bolt from the blue for the Airbus team when the expected orders for the Gulf carrier Emirates fizzled out in public and the signing ceremony was cancelled. It is a common understanding that no ceremony gets cancelled if it was not programmed; and it would not be programmed without having reached a deal in advance. Emirates seems to have backed out just before signing, making it extremely embarrassing for the other side. 

Chairman of Emirates group, Sheikh Ahmed bin Saeed Al Maktoum, had hinted few weeks ago about the size of the order and possible signing at Dubai, provided the negotiations were completed on time. As there had been no orders for five years, possibly the Airbus team was overoptimistic that the deal was more or less within its grasp. Emirates, on its part, overdid it by not just humiliating Airbus at Dubai, the Emirates home turf, but also adding insult to injury by ordering $15 billion worth of hardware from Boeing! 

The reason for the debacle was possibly frustration of Emirates that it was not getting more efficient version of Airbus known as A380neo. The A380 superjumbo is literally monopolised by Emirates, which owns 46 percent of these planes that are currently flying. Other airlines have thus baulked at ordering A380neo, and Airbus is non-committal on neo for the same reason. 

Some Chinese help
Strangely, Emirates now wants Airbus to find new clients, possibly in the hope that chances for neo will then improve. Unfortunately, there are not many A380 operators and most are happy with small numbers they have. Finding new operators of A380 will be hard under prevailing conditions. 
There are more chances of neo club members buying old hardware than new ones. Fall in price of oil combined with geopolitical tussles in the region have reflected negatively on the overall Gulf economy, and also with ME3 (Emirates, Etihad and Qatar) carriers. Reports speak of Emirate’s profits plunging 82 percent, which could be another reason for the A380 debacle in Dubai. Unthinkable as it might be, Emirates is now said to be pondering some sort of operational relationship with Etihad.  

Peter Billew, the CEO of Malaysian Airlines, feels the A380 was designed as a ‘high-density’ aircraft, and it is in high density seating that it will eventually achieve success. He feels that it has been completely miss-sold. Perhaps, Emirates, Etihad and Qatar do not quite subscribe to that notion. Middle East airlines have excellent geographical advantage, with two-thirds of the world about an eight-hour flight away. Surely, Emirates is making full use of that advantage by using A380s.

That said it is not all gloom for A380 despite the Dubai debacle, as it happens to be a product of mutual interest for both the sides. All that is needed is for frayed tempers to cool down. Emirates seeks a 10-year guarantee on A380 production; it does not want to be left in the lurch lest production be suddenly stopped. There should be some solution soon, as there is no other option. It is said that Chinese airlines might need around 60 to 100 A380s over the next five years as passenger numbers grow while airport slots get scare. Surely, most of those going the Chinese way will be the used ones. This provides the strongest hope for continuation of the program for not just 10 years but well beyond it. Who knows, it might even lead to A380neo.  
Being at the periphery, we are not in any way affected by whatever happens to the A380. Far removed from its operational realm, we can only wait with our fingers crossed.

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