Dubai Airshow 2021 Opens Today with Reasonable Outcome Expectations

Defence Industry

By Sri Krishna

New Delhi: Dubai Airshow 2021 took off today to a spirited start. Described as the first big event since the Covid-19 pandemic turned the travel sector upside, the biennial aviation display Dubai Airshow 2021 is expected to be different from the previous ones as the industry looks very different today. With representation from 13 new countries, 160 plus of the most advanced aircraft display and over 370 new exhibitors, Dubai Airshow 2021 once again proved that its rightly the world’s most exciting airshow.

The deals which are expected to be struck at the five-day event opening November 14 is expected to focus on military deals having on display cutting-edge technologies as also in the freight sector. With China and US adopting tough aggressive postures towards each other, the two countries defence industries are expected to go in for hard sell of their products to the oil rich gulf nations.

The Airshow will provide the platform for nations specially the militarily advanced countries who are the key figures in contemporary  geopolitics to put on display their military wares. Weapons sales — or lack thereof — are major sticking points for both the US and its Gulf allies, in particular the United Arab Emirates.

Fighter jet fleet upgrades and new counter-UAS (unmanned aerial systems) technologies are likely to be major themes at the industry show, especially considering the rise in drone attacks around the region in recent years.

However, what will be closely followed would  be on whether prior agreements made under the Trump administration to sell certain US weapons systems to the UAE will actually come through — agreements that have been stalled since the Biden administration came to power.

The sales in question are of the coveted Lockheed Martin F-35 II joint strike fighter jet and the General Atomics MQ-9 Reaper drone, which, if completed, would mark the first sale of the F-35 and US-made armed drones to any Arab country.

“For quite a while, the UAE has had an outstanding fighter aircraft requirement moving towards an F-35 purchase but, you know, terribly fraught with complications,” said Richard Aboulafia, vice president of analysis at Teal Group.

The show becomes significant for after Israel and the UAE signed the Abraham Accords in August 2020, has paved the way for normalizing relations and  cooperation and trade across nearly all sectors. With this, US export regulations which had prevented Washington from selling lethal drones to any of its Arab allies has changed. The export restrictions on armed drones were loosened by the Trump administration in July, 2020 to allow certain drones — including the lethal Reapers — to be sold to friendly Arab states.

According to defence analysts like Charles Forrester at HS Jane’s, Washington was “trying to kind of come into the pragmatic reality of what the current global environment is for unmanned systems.”

Another factor for this attitudinal change in American defence industry towards sale of drones to Gulf nations is the fear of losing market share to China, which has been selling its own armed drones to Arab states, including the UAE.

“The Trump administration was … realizing that if they didn’t adjust their policies, they would lose power, influence and technological space to China,” Forrester said.

As to the segment of aerospace which was attracting China to the Gulf, defence analyst Aboulafia said: “Oh, unquestionably drones. Absolutely. Drones, drones, drones. And you know, there’s no such thing as a passive platform anymore. Everything sucks up data. So that’s a real concern.″

The UAE and several other nations have been buying Chinese-made Wing Loong armed drones, but the purchases come with their own challenges. Aside from some performance issues, the Chinese technology can’t be integrated with the UAE’s command and control systems, because those are designed by American companies.

“They don’t have interoperability. That’s very important,” Forrester said. “But the UAE has still been using them anyway. They’ve been able to use them sufficiently despite that, because they’ve not had the option to do otherwise.”

The US attitude since Joe Biden became President was one of what is described as a flip flop which could also cause problems for the American defence industry. This was reportedly because of US concern over growing ties between the UAE and China.

In 2020, a Pentagon report said that China was “very likely already considering and planning for additional overseas military logistics facilities,” in the UAE, among other countries.

The Emirati government rejected the concerns, with its ambassador to the US, Yousef al-Otaiba, saying  earlier this year: “The UAE has a long and consistent track record of protecting US military technology, both in coalitions where we’ve served alongside the US military and inside the UAE where a broad range of sensitive US military assets have been deployed for many years.”

According to reports, negotiations are reportedly going on  with a fair amount of back-and-forth on how the deal should progress. The current deal would see the F-35 jets beginning delivery to the UAE in 2027; a stronger Chinese presence in the UAE could delay that indefinitely.

After virtually coming to a standstill for nearly two years due to the pandemic, the travel and airline industry  is picking up again with the continued successful rollout of vaccination campaigns and easing of governments’ Covid restrictions.

“Executives are cautiously optimistic about the future,” aviation analysts at consultancy Accenture said. Analysts don’t expect too many major orders this year at this show since it is  smaller than the Paris or Farnborough events.

It’s also because the order books for Gulf carriers “tend to be more widebody focused,” said Sheila Kahyaoglu, aerospace and defence analyst at Jefferies. “So I think that given international traffic is slower, I just don’t think that will be a catalyst for more orders.”

Within aviation, supply chain shortages are mostly hitting the defence space, Kahyaoglu said. “In communications systems, ships, semiconductor parts — just wherever it’s hitting the rest of the world.”

However, Kahyaoglu said that in the business jet segment, there is less of an impact as fewer private jets are manufactured per year than other types of aircraft, but it still “creates a bit of a shortage on parts, so OEMs [original equipment manufacturers] have to be cognizant of their material purchases.”

More than half of aerospace executives — 55% — “expressed lower confidence in their supply chain timeliness and quality over the next six months,” according to Accenture.

Though passenger traffic did have a major setback due to the pandemic as many airlines were forced to ground their aircraft due to long period of lockdown restricting movement.

Prior to the pandemic, a significant volume of cargo was transported in the belly of passenger planes. After those planes went offline as travel restrictions went up,  there was a demand for dedicated cargo jets because that belly cargo isn’t available, says Aboulafia. This was because e-commerce and the movement of products has continued to grow.

In view of this development, analysts feel that one can expect to see Airbus and Boeing — the world’s two largest aerospace companies by revenue — display new large freighter versions of existing aircraft.

“You’ll see Airbus talk about, maybe even launch, a freighter version of the A350 XWB jetliner,” he said.

“And you might see exactly the same thing from Boeing with the freighter version of the 777X, the latest version of the 777, which has composite wings and such. That’ll be really interesting to watch because the Gulf is a pretty big large cargo market,” Aboulafia.

“The Dubai Airshow 2021 is a great opportunity to meet our clients face to face, further strengthening our business relationship, which is a main priority for LHT in the region. It is also a great place to reach out to potential customers and business partners,” said Ziad Al Hazmi, chief executive officer, Lufthansa Technik Middle East.

Air Arabia, the Middle East and North Africa’s first and largest low-cost carrier (LCC) operator, will showcase its latest A321neo-LR alongside the latest innovation, technologies and cabin configuration. The carrier also unveiled a special livery on its Airbus A320 and A321 neo-LR aircraft to commemorate the nation’s golden jubilee. Air Arabia’s latest A321 neo-LR can accommodate 215 passengers.