Market Overview

Record Aircraft Purchases Put Boeing on Top of Growing Middle Eastern Airline Market

Record Aircraft Purchases Put Boeing on Top of Growing Middle Eastern Airline Market

Boeing (NYSE: BA) has apparently won a major dogfight in the ongoing battle against its trans-Atlantic competition, while helping to solidify its presence in one of the world's fastest-growing air passenger markets for years to come.

On Sunday, the first day of the Dubai Airshow, Boeing received orders from three Middle Eastern airlines for more than 340 of its aircraft – including 225 of its newly-launched Boeing 777X jets, the upgraded version of its popular 777 aircraft. Those purchases had a total price tag of around $100 billion.

In comparison, according to The Associated Press, Europe's Airbus, owned by EADS (OTC: EADSY) received around 140 orders at the air show for its planes, bringing in $40 billion.

On any other day, Airbus would probably be sounding triumphant, but Reuters quotes an unnamed senior industry source, who says Airbus “is desperate to blunt the impact of the 777X,” which is scheduled to enter into service by 2020.

The news also underscores the growing importance of the Middle East as a global air transport hub.

"In recent years, much of the action in global aviation has shifted to the Middle East,” Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Emirates Airline Group, told AP, “because countries like the U.A.E. and Qatar have tapped into our geographical advantage to build a new air transport connection for the world.”

Emirates made up the lion's share of the Boeing purchases – ordering 150 of the 777Xs, as well as 35 777-8Xs and 115 777-9Xs. According to a press statement, the overall purchase – which includes 300 GE-X engines from General Electric (NYSE: GE) – is the largest in the history of U.S. commercial aviation.

Reuters, meanwhile, says Boeing has promised to not let an ongoing labor dispute with workers in Seattle to ground its 777X production. Last week, the company's machinists union rejected a proposed contract extention that, according to The Seattle Times, who have called for major union concessions in exchange for guarantees the 777X would be built in Washington State.

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