Middle East plane demand forecast cut in tough market

The Abu Dhabi carrier Etihad is currently in consolidation and restructuring mode. (Reuters)
Updated 17 July 2018

Middle East plane demand forecast cut in tough market

  • The world’s biggest plane maker Boeing said it expects 2,990 aircraft deliveries to the Middle East over the next two decades
  • Despite the lower forecast Boeing said Middle Eastern airlines can expect resilient growth in the coming 20 years

LONDON: Boeing has cut its two-decade forecast for plane deliveries to the Middle East, as Gulf carriers face turbulent times amid a wider backdrop of regional strife.

The world’s biggest plane maker on Tuesday said it expects 2,990 aircraft deliveries to the Middle East over the next two decades, with a total market value of $660 billion.

That is lower than last year, when Boeing forecast that there would be 3,350 aircraft deliveries between 2017 and 2036, with a market value of $730 billion.

Boeing said that the total fleet size in the Middle East would stand at 3,890 by 2037, lower than the 3,900 it forecast earlier for the year 2036. The news comes at a turbulent time for several Middle Eastern carriers.

The Abu Dhabi carrier Etihad is currently in consolidation and restructuring mode, its international expansion plans on hold following the insolvency of its European partners Air Berlin and Alitalia. The airline posted an annual loss of $1.5 billion for 2017.


Dubai’s Emirates has fared better than its Abu Dhabi counterpart, reporting a $1.1 billion profit for the year ending March 2018.

But Qatar Airways has been hit hard by the boycott of its home market by the Anti-Terror Quartet — Saudi Arabia, the UAE, Bahrain and Egypt — with flights between those countries and Doha suspended.

Despite the lower forecast, Boeing said Middle Eastern airlines can expect “resilient growth” in the coming 20 years.

“Today, the Middle East accounts for only 3.7 percent of global GDP, while its airlines provide about 10 percent of global capacity, illustrating some of the region’s advantages,” Boeing said in its Commercial Market Outlook.

The lower forecast for the Middle East is at odds with the global trend, with Boeing raising its long-term estimate for commercial airplanes orders on the back of rising passenger traffic and upcoming airplane retirements.

Its report, published yesterday to coincide with the Farnborough International Airshow in the UK, said that globally there would be a need for 42,730 new jets — valued at $6.3 trillion — over the next 20 years.

That is a 3 percent increase from its estimate a year ago, when it forecast 41,030 deliveries.

“The global airplane fleet will also sustain growing demand for commercial aviation services, leading to a total market opportunity of $15 trillion,” Boeing said.

“For the first time in years, we are seeing economies growing in every region of the world. This synchronized growth is providing more stimulus for global air travel. We are seeing strong traffic trends not only in the emerging markets of China and India, but also the mature markets of Europe and North America,” said Randy Tinseth, vice president of commercial marketing at Boeing.

“Along with continued traffic expansion, the data show a big retirement wave approaching as older airplanes age out of the global fleet.”

Tinseth said that 44 percent of the new airplane orders globally will be needed to replace old jets, while the rest will support future growth.

Including airplanes that will be retained, the global fleet is projected to essentially double in size to 48,540 by 2037.

Boeing has racked up several deals at Farnborough, with the Russian airline Volga Dnepr committing to buy Boeing freighters worth $11.8 billion at list prices, and US leasing company Air Lease Corp. saying it would buy as many as 78 Boeing aircraft worth $9.6 billion.

Rival plane maker Airbus won a provisional deal for 100 single-aisle A320 family jets, worth about $11.5 billion at list prices, for an unidentified customer.


Global airplane deliveries to 2037 / Asia Pacific 16,930 / North America 8,800 / Europe 8,490 / Middle East 2,990 / Latin America 3,040 / Russia/C.I.S. 1,290 / Africa 1,190

Huawei warns US patent curbs would hurt global tech

Updated 27 June 2019

Huawei warns US patent curbs would hurt global tech

  • US senator’s proposal comes amid mounting American action against Huawei
  • Huawei’s US sales of network gear evaporated after a congressional panel labeled the company a security threat in 2012

SHENZHEN, China: Chinese tech giant Huawei warned Thursday a US senator’s proposal to block the company from pursuing damages in patent courts would be a “catastrophe for global innovation.”
The proposal comes amid mounting US action against Huawei, the biggest maker of switching gear for phone carriers, amid tension over Beijing’s technology ambitions. The company has been devastated by the Trump administration’s decision to impose restrictions on its access to American chips for smartphones and other components and technology.
Disrupting Huawei’s access to US patent courts would threaten the intellectual property system that supports technology development, said Song Liping, the company’s chief legal officer.
The proposal by Sen. Marco Rubio, a Republican from Florida, followed reports Huawei Technologies Ltd. is asking for $1 billion from American phone carrier Verizon for use of the Chinese company’s patents.
“If such a legislative proposal were to be passed, it would be a catastrophe for global innovation. It would have terrible consequences,” Song said at a news conference. He said it would “break the foundation of IP protection.”
American officials accuse Huawei of facilitating Chinese spying, a charge the company denies, and see it as a growing competitive threat to US technology industries.
Huawei’s founder, Ren Zhengfei, said this month it has cut its project sales by $30 billion over the next two years due to curbs on access to American chips and other components. He said smartphone sales outside China will fall 40 percent.
Huawei’s US sales of network gear evaporated after a congressional panel labeled the company a security threat in 2012 and told phone carriers to avoid it. But the Chinese company has a patent portfolio it licenses to manufacturers and carriers.
Song gave no confirmation of how much Huawei wants from Verizon or the basis of its claims.
“Intellectual property litigations are matters that should be heard and ruled on by courts. They should not be politicized,” he said.
Huawei, founded in 1986, has China’s biggest corporate research and development budget at $15 billion in 2018. The company is a leader in developing next-generation telecoms technology.
On Wednesday, a US federal court jury in Texas ruled Huawei stole trade secrets from a Silicon Valley company but awarded no damages, saying the Chinese company didn’t benefit.
The jury rejected Huawei’s claims that Cnex Labs Inc. co-founder Yiren Huang stole its technology while he worked at a Huawei subsidiary.
Huawei’s head of intellectual property, Jason Ding, said the company was studying the verdict and deciding what to do next.
Asked about a report by Bloomberg News that some Huawei researchers had published papers with Chinese military personnel over the past decade, Song said the company wasn’t aware of its employees publishing research as private individuals.
“We don’t customize products or do research for the military,” said Song. “We are not aware of employees publishing papers. We don’t have projects of that kind.”