December 2004/January 2005
Volume 03, Issue 8
|Moving people across the globe
About 70 percent of Boeing Commercial Airplanes' sales come from outside the United Statesand the business unit considers the Middle East especially key. Consider, for example, the fact that Dubai International Airportthe region's largest and a major transportation hublast year reported 13 percent growth in passenger traffic. The facility's ongoing multibillion dollar construction project is a testament to its success. It's projected that by 2010, 60 million passengers are expected to pass through its gates. And Dubai-based Emirates' order of up to 13 777-300ERs, announced during the Farnborough International Airshow in July, is yet another indication of the growth happening here.
"When you're looking at the end of a resource extraction economy," said Teal Group analyst Richard Aboulafia of Dubai's reduced dependence on oil income, "you look for a service economysomething that leverages educated manpowerand then you look at your natural resources. Of course, you've got weather, so you might attract people if you build sun and sand places. Geography is on their side, too."
Dubai has been transformed into a big shopping hub, and its airport's at the center. "You encourage [other airlines] to make this stop and all of a sudden, you're siphoning a lot of the world's air traffic," said Aboulafia, comparing Emirates' approach to Singapore Airlines' strategy years ago.
Because of its long-standing relationships in the regionand because it hopes to capture market share with full-service and lower-cost airlinesCommercial Airplanes recently restructured its marketing and sales force in Dubai. It's named a new sales director for Emirates, one who will be based in a permanent office in Dubai, and is looking into adding another sales director who also will be based in the region.
"You look at Boeing's position in the region and there's a very impressive existing fleet position, which is very enviable from an aftermarket and follow-on sales standpoint," said Aboulafia, who expects the potential for new airline competition to blossom within the next five years.
"From an economic standpoint, the long term prospects tend to be impressive," said Lee Monson, Commercial Airplanes' senior vice president of sales in the Middle East and Africa. "Growth is occurring that we would not have seen even three or four years ago." Also, for Middle East residents, "there's a growing desire and opportunity to travel outside of the Gulf. As a result of the economic engine, you have people who are ready, willing and capable of seeing and doing business in other parts of the world."
Plus, showcase events such as the biennial Dubai Air Show bring new visitors to this dazzling, cosmopolitan city, putting a very modern face on this historic region.
Hoping to capitalize on this increased traffic, Commercial Airplanes is targeting Middle Eastern airlines with its 7E7 Dreamliner. The world-traveling 7E7 Road Show landed in Dubai this spring, giving potential airline customers a first-hand look at the game-changing airplane. Some airlines here also are taking part in the 7E7's developmental phase.
"This is a perfect part of the world to demonstrate the benefit from going point to point," said Monson, who said several 7E7 campaigns are pending across the region. Point-to-point travel allows passengers to fly nonstop to their desired destination, rather than having to fly through hubs. And when the first 777-200LR is delivered to launch customer Pakistan International Airlines in 2006, the region's carriers will have another jet capable of connecting city pairs like Dubai and Chicagoor any location in the Middle East to the South Pacific and the Americas, Monson said.
"We certainly feel like [the 777-200LR] has wide-ranging application, again going back to our point-to-point route structure," said Monson.
Another sign of Commercial Airplanes' commitment is the Boeing Dubai Service Center, one of eight Boeing spares distribution facilities worldwide. With $20 million worth of parts, the center's inventory contains 13,000 line items that are shipped around the regionand across the world, if neededto service airline customers.
The presence of eight Field Service offices in the region is an important benefit to Commercial Airplanes customers here, as 15 representatives and Regional Director Steve Sherman are constantly on the road, supporting airline operations on-site. "If I'm not out with my people and my customers, I'm not doing my job. I think listening is the big key," said Sherman, who once drove four hours in the middle of the night to Oman to meet with a customer and address his problem.
Field Service also works closely with Commercial Airplanes on regional airline sales campaigns. "We're sending a very clear signal we're here to stay," Sherman said, "and to retain our position as No. 1 in customer support."
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