Boeing Sees Middle East Investment Bearing Returns

AIN Air Transport Perspective » October 21, 2013
Iraqi Airways took delivery of its first Boeing 737-800 in August. It has committed to thirty 737NGs and ten 787s. (Photo: Boeing)
October 21, 2013, 10:25 AM

As the aerospace industry turns its attention to the Middle East for the 2013 Dubai Air Show, it might take for granted the prominent presence of Boeing Commercial Airplanes. This year, however, Boeing hopes that its local partners view its participation as less of a marketing exercise than of a demonstration of its commitment to industrial and societal development in the region.

Over the past five years, Boeing has worked especially hard to develop relationships and devote more resources in general to the Middle East in an effort to become a better corporate citizen, according to Boeing Commercial Airplanes Middle East vice president of sales Marty Bentrott. Speaking with AIN a few weeks before the Dubai show, Bentrott acknowledged that Boeing underestimated the Middle East market for single-aisle airplanes roughly a decade ago, leaving it somewhat unprepared for the subsequent surge in demand among low-fare carriers, for example. As a result, its 737 line accounts for only 38 percent of the single-aisle airplanes in operation and just 30 percent of the backlog in the Middle East. Encouraged by the prospect of an imminent order for many 737 Maxs by current 737-800 operator FlyDubai, however, Boeing expects its backlog share to increase significantly by the end of the Dubai show.

“We took our eye off the ball back in the late ’90s and early 2000s,” said Bentrott. “Airbus took advantage of what it deemed to be a strong, growing market and I think we probably didn’t expect things to take off the way they have taken off. [Today] we are more focused on customers and relationships, and if you looked at the data over the past five years our market share has been around 60 percent through the region, so we’ve done pretty well overall.”

Bentrott noted that Boeing has added three representatives at its Dubai office in the past three years to help with sales coverage in the region, and that the performance of the products in service, most notably its 737s with FlyDubai and Oman Air, has served as perhaps the most effective marketing tool.

“So as we’ve had some successes there, the airplanes have performed well and the customers like them and their utilization levels are high, so they’re maximizing the revenue capability of those airplanes,” explained Bentrott. “And then certainly on the widebodies the success of the [777-]300ER has just been phenomenal compared to our competition. You’ve seen what has happened to the A340, and those that operate them today would just as soon get rid of them as soon as they could.”

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