INTERVIEW: Habib Fekih, Airbus Middle East
Within months of unveiling its Global Market Forecast (GMF) for 2010-2029, Airbus was forced to recalculate its short-term predictions for the Middle East and North Africa, based on political unrest in countries such as Bahrain, Tunisia, Egypt, Libya and Yemen. Before the recent uprisings, at least 150 sales were expected in the region this year – a figure that has since been reduced by a third, according to Habib Fekih, Airbus president in the Middle East. “Some of these countries with unrest had potential for aircraft bookings, so there will be a short-term impact from the political situation,” he explains from the company’s headquarters in Dubai Airport Free Zone.
“At the same time, our GMF already takes into account short-term peaks and troughs, and air travel has often proved resilient to external shocks, so there are still plenty of growth opportunities in theregion. I am confident that around 90 or 100 orders can be achieved in 2011, which marks a respectable increase from 52 orders the year before.”
Waving a copy of the 2010-2029 forecast in his hand, he explains that almost 26,000 new passenger and freighter aircraft will be needed to satisfy global demand over the next 20 years, valued at a staggering US$3.2 trillion. A number of factors will contribute to this growth, such as the replacement of older aircraft with more eco-efficient models, capacity increases on existing routes, growth in emerging markets, further liberalisation and the increased popularity of low-cost carriers.
“Out of the 26,000 aircraft needed, around 25,000 will be passenger models, so there is a heavy focus on that segment at the moment,” continues Fekih. “We believe that 15,000 of these are being purchased to support the future growth of airlines, while the remaining 10,000 will replace older, less eco-efficient aircraft.”
Airbus is expected to secure around half of these orders, so there’s little surprise at Fekih’s enthusiasm for number crunching, especially as the Middle East accounts for around a quarter of the company’s commercial backlog. This contribution was further boosted last year, with the region playing a fundamental role in the global booking of 644 aircraft, including a combination of A380s, A330/340s, and various models from the A320 family.
“The market recovery has continued to be stronger than initially expected and that will continue in the future too, especially in emerging markets such as the Middle East, where passenger traffic is expected to double before 2017,” states the executive. “This offers a huge opportunity for Airbus and remember that our market share is greater in this region compared to Boeing. We have around 55-60% of the Middle East market and our product range is well-positioned to meet the needs of regional carriers for sustainable growth.”
A respected veteran in the aviation world, Fekih was recruited by Airbus in 1986 and currently has responsibility for operations in the GCC, in addition to countries such as Egypt, Algeria, Libya, Jordan, Syria, Morocco, Lebanon, Iraq and Pakistan. “Watching the growth of Middle East aviation over the past 25 years that I have spent at Airbus has been a wonderful experience. Today, we have the likes of Emirates, Etihad and Qatar Airways, who offer a passenger experience that is much, much better than the global average,” he maintains.
“Of course, these airlines are very demanding customers for Airbus due to their high standards, but we constantly strive to meet their expectations and this supports our product development too. As the launch customers for models such as the A350 and A380, I would say the Gulf carriers have been more involved in our aircraft than their counterparts in bigger regions such as the United States.”
That influence is likely to strengthen in the future too and even with the current political situation, Fekih believes that orders will be delayed rather than cancelled, while some deliveries may also be postponed. According to hearsay, this could include EgyptAir, which has apparently placed a booking announcement on hold for the time being. In the long-term, however, Africa’s second largest airline could be a candidate for the A380, believes Fekih, along with Saudi Arabian Airlines.
No more than 10 orders are expected for the superjumbo in the Middle East this year, although these could also hail from existing customers. “The global market is strong for the superjumbo and Gulf carriers such as Qatar Airways and Etihad will be amongst the first to capitalise on the benefits of larger planes to absorb traffic growth, minimise airport congestion, reduce costs and increase eco-efficiency,” he says. “Of course, Emirates is our biggest customer for this model and will receive a handful of the A380s in 2011.”
Fekih believes that a number of airlines have been keeping tabs on progress with the A380 and will soon come forward to make orders, based on the model’s success with launch customers. “We already had a first wave of interest, where carriers such as Emirates, Air France, Qantas and Singapore Airlines trusted the concept and became launch customers. This was followed by a wait-and-see period and now a second wave will commence, with a heavy stream of interest over the next couple of years,” he explains.
To prepare for this, Airbus is boosting its A380 production to more than two a month in 2011 and will head towards three a month in 2012, although the delivery rate also depends on cabin outfitting and customer delivery schedules. “We are ready for the second wave, which already started with a booking for four A380s by Japan’s Skymark Airlines in February this year,” adds Fekih. “Of course, we are also working with Qatar Airways and Etihad for their first A380s. I know the industry is closely watching this development. They are both premium airlines, like Emirates, so I do not expect too much variation on how the aircraft will be utilised.”
With an impressive 25 years already spent with Airbus, it seems Fekih will be around to overlook much of this progress, in addition to many other exciting developments in the Middle East. “What better place to work,” he laughs. “Ever since I was recruited by this company from Tunisair, I have shouted about the potential of the Middle East and my instincts have been justified by our latest Global Market Forecast, which estimates that the region’s share of global traffic will increase from 6% to 9% by 2029. In fact, we will need to supply around 800 aircraft in the Middle East over the next 20 years, so my team will be kept very busy and we couldn’t be happier.”