ANALYSIS: How the Gulf mega-carriers just got a bit bigger

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The Gulf's mega-carriers are banking on continued double-digit growth into the next decade after a mind-boggling collective show of strength in aircraft orders at the Dubai air show.

Even by the airline's own standards, the frenzy of orders announced by Etihad, Emirates and Qatar Airways was unprecedented. In a matter of hours the three revealed order and option commitments for more than 500 aircraft – the vast majority widebodies – or over 600 when Emirates unit Flydubai is included. In the process, they helped launch the new 777X family and placed the single biggest order for the world’s largest aircraft. By comparison, no other firm order during the air show mustered double-figures.

Emirates’ move for 50 more Airbus A380s takes its commitments to the type to 140, of which 39 have so far been delivered. It also committed to 200 Boeing 777-9X – 150 of them firm – which are set to arrive at the turn of the decade.

Emirates was joined – literally in a joint press event – in ordering the type by Qatar Airways and, separately, by Etihad Airways. The letter of intent for 50 777-9Xs from Qatar and the order for 25 777X family – including the launch order for the -8X model – from Etihad form the mainstay of deals which enabled Boeing to formally launch the new family. Boeing chief executive James McNerney was probably not exaggerating when he described it as a historic day for the airlines and manufacturer, but "I, daresay, the world".

The 777X was just part of the Etihad picture. The airline's orders and commitments for 199 aircraft – split across seven Airbus and Boeing types – marked a return to the air-show deal-making stage for the first time since 2008. The orders will support the carrier’s growth and that of its partners – 10 A320neos will be acquired and taken by Air Serbia – and its follow-on for 30 Boeing 787s make it the single biggest Dreamliner customer. Qatar’s deal for 13 A330-200 freighters – five of them firm – was almost lost in the order haze.

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The orders of course raise questions over where and how the new capacity will be deployed. While Emirates will use some of the aircraft for fleet replacement, it sees no reason why double-digit growth cannot continue into the next decade. "If there is business we can do it, why not, I don’t think we will stop," says Emirates chairman Sheikh Ahmed Bin Saeed Al Maktoum.

In the past, the expansion of Emirates has been slowed by countries refusing to open up routes and airports, but this protectionist attitude is changing, says Sheikh Ahmed. Some countries were sometimes "scared" to allow access to Emirates, but the carrier has seen a "big shift" in approach in some regions, such as the USA and some European countries, he says.

Australia, where Emirates has now working with close partner Qantas, is another country that has changed significantly, says Sheikh Ahmed. Emirates began service there in 1996. "We went there in 1994 to negotiate, and they only allowed us seven flights per week [between Dubai and Australia]," he explains. "Now we are close to 100 flights per week."

Emirates could also continue operating A380s beyond the airline's standard 12-year cycle if it struggles to pass the double-deck type to secondary operators. Emirates Airline president Tim Clark says that its 15 A380s on operating leases are "not our problem". But he adds that the carrier could continue to operate the others for another three years: 15 in total.

It will not just be more big aircraft, but more seats on them as well, as Emirates is still planning to introduce a two-class configuration. Emirates started A380 operations with aircraft in 489-seat configuration before introducing a 517-seat version. Clark says the airline will bring in a higher-density 617-seat layout from October 2015.

The new 777-9X, which is larger than its 777-300ERs, will fly the "same mission with a greater number of passengers", adds Clark.

"It’s a step-change in the way we’re going to operate," he says, pointing to the 16-17% improvement in fuel burn the new twinjet’s composite wing will provide. "But we have to wait seven or eight years for them to arrive."

The carrier’s interim results – in November, it disclosed group first half net profits up 4% to Dhs2.2 billion ($600 million) on higher yields and unchanged load factors – suggests it is not having trouble filling the aircraft so far.

It seems apt that all this order activity – and this is before commitments for 111 aircraft for its low-cost unit Flydubai – should have been made at the city's massive, and newly opened to passenger flights, Dubai World Central airport. The new hub certainly provides room to grow.

The more than 100 aircraft ordered by Etihad will support the next stage of it growth. But the carrier – still playing catch-up, in size terms, with its bigger neighbours – continues to grow on all fronts.

Its Serbian acquisition Jat Airways at the end of October flew its first flight with an Airbus A319 in the rebranded Air Serbia colours. Symbolically the jet was deployed on a new route to Abu Dhabi, marking the start of a fleet renewal which will culminate in it taking its first new aircraft for 30 years in the form of 10 A320neos ordered by Etihad during the air show.

Etihad also in November completed its acquisition of a 24% stake in India’s Jet Airways after securing regulatory approval, while announcing a 33% acquisition of Swiss regional carrier Darwin Airways – a move whereby it will launch Saab 340-operated flights under the Etihad Regional branding.

The move into the regional airline market is a "step change" for Etihad to create a "unique approach to network development for global airlines", says Etihad chief executive James Hogan. He adds that the Darwin model could be employed for additional regional airlines that might become Etihad’s partners.