An outline contract agreed on Monday for the supply of 10 Airbus A320 aircraft to Yemen's national carrier is among the few highlights of this year's Dubai Airshow, noticeable for its lack of big deals. The organizers' hopes of beating the $155.5 billion in orders chalked up at the last show in 2007 were fading fast as the show's second day produced only one big agreement, to follow the one major deal unveiled on the first day. The memorandum of understanding between Yemenia Airlines and Airbus - worth $700 million at catalogue prices - was the sole sizeable civil aircraft order announced on the second day of the monster biennal event. Airbus chief operating officer John Leahy said he expects the MOU to be firmed up within 30 days but Yemenia board member Saleh Alawaji said the deal still needs the “blessing” of the carrier's board. The European aircraft maker also boosted its order book on Sunday with confirmation of a $2.9 billion order by Ethiopian Airlines for 12 A350 XWB units. No other major announcements for aircraft purchase have been made at the show, which two years ago saw Airbus and its US arch-rival Boeing bag orders and letters of intent for at least 458 aircraft worth more than $75 billion, mainly from Gulf carriers. The number of exhibitors is up 10 percent at 890 and Allison Weller, director of show organizer F and E Aerospace, predicted beforehand that the value of orders would top 2007 level. “I am cautiously optimistic that the Dubai Airshow will signal a return to a healthy marketplace,” she said. But the lack of robust civil aviation activity at the Dubai event comes as no surprise to analysts, as the industry continues to suffer the impact of the global financial crisis. Airbus' chief Tom Enders acknowledged on Sunday that the aviation industry is in for a “challenging” two years, due to the world global economic slowdown, but he expressed optimism that the industry will make a come back. “I share the assumption that 2010-2011 will still be difficult years. Nevertheless, I am optimistic that we will get through this,” Enders told reporters at the show. “We are in a growth industry... We are used to cycles... we will get through it.” The European group's big rival Boeing said on Monday that it expects the industry to start recovering by next year and with a return to profit for airlines by 2011. It expects an increase in aircraft demand by 2012. The US manufacturer also highlighted the steady growth of Middle East carriers, which have bucked the slowing trend and have potential for further expansion. “We see tremendous growth for the Middle East region,” Randy Tinseth, vice president of marketing at Boeing Commercial Airplanes, said on the sidelines of the show. He predicted that the region's carriers, which already have long lists of orders, will need “1,710 new airplanes at $300 billion over the next 20 years.” Gulf carriers such as Dubai's Emirates, Abu Dhabi's Etihad, and Qatar Airways, have been increasing their share in the market of transit travel between Europe, Asia and Australia. Meanwhile, Thales, the French defense electronics firm, said on Monday it had won a contract worth about 30 million euros ($44.63 million) to develop a new civil aviation academy in Saudi Arabia. The academy, to be located in Jeddah, will provide training for 500 trainees in air traffic control, maintenance of civil aviation systems and airport security, Thales said in a statement during the Dubai air show. The Middle East and Gulf Arab region accounted for about 10 percent of the group's annual revenues with 1.1 billion euros. Airbus on Monday got its second aircraft order at the Dubai Airshow with an agreement to sell 10 A320 planes to Yemen, while its US rival Boeing Co. managed to cut a Mideast deal of its own even though it has yet to score a plane order at the region's top aviation meet. The Chicago-based Boeing said it signed an agreement with Abu Dhabi's state investment vehicle Mubadala Development Co. to collaborate on multiple projects designed to help the UAE's largest sheikdom build an aerospace industry as it seeks to diversify its economy beyond the oil patch. Airbus said a memorandum of understanding it signed with Yemen's national carrier Yemenia on Monday was worth $700 million at list prices. Airlines typically negotiate bulk discounts, however, especially in tough economic times. A day earlier, Toulouse, France-based Airbus finalized a $3 billion deal with Ethiopian Airlines for 12 A350 XWB aircraft that had been agreed earlier in the year under a similar memorandum – effectively a promise to buy. Airbus officials said the company only adds requests to its order books once those promise agreements are finalized. The two deals reflect an emphasis on smaller carriers and more modest orders at this year's Dubai show as the global economic downturn squeezes the industry. Yemenia plans to use its A320s to expand service on routes to the Middle East, Africa, India and Europe.
