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Boeing had an excellent show in Dubai.  The company sold 225 777X models plus 30 787-10s and 90 737s.  All told, at retail,  this amounts to over $100bn.  Great numbers, but also a bit wobbly.

These orders essentially come from three airlines.  These are strong airlines with impressive growth tracks.  Bear in mind these same three airlines also ordered well over $20bn worth of aircraft from Airbus.  It was a blowout spending spree, for which these airlines are now well known.

Let’s get to the wobbly bit.  For Boeing there is a growing dependency on these three airlines. (Its even worse for Airbus’ A380 program) Take a look at these charts.

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These three Gulf carriers have created a significant backlog with Boeing and its newest twin-aisle aircraft.  Perhaps looking at some past order history provides useful perspective. The table below does this.  The Middle East region is fifth in Boeing’s order history.

Boeing (and Airbus) have become more dependent on these three Gulf airlines.  The Gulf carriers’ fleet growth plans clearly see traffic growth.  But by far their traffic growth must come from taking away traffic from others rather than organic traffic growth.  This opinion is understood by the EU carriers especially.  But others also see these orders for what they are.

The EU airlines have expressed displeasure at growth of the big three Gulf airlines.  But that did not stop traffic from flowing over the Gulf and away from established airlines.  Qantas had to move its Kangaroo service from Singapore to Dubai and cooperate with Emirates.  Singapore Airlines has seen steady yield erosion.  The trend is real.

The continued growth of the three Gulf carriers means greater dependency on them by Boeing and Airbus. But that also makes existing, and well established airlines, more risky.  The growth in the Gulf is highly disruptive to the industry status quo, ergo this growth is wobbly.  Greater dependence on the three Gulf airlines does not make the business more stable for Boeing and Airbus.

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