Dubai to Exhibit Jet Demand Amidst Middle East Tensions

Dubai is set to hold its biennial aerospace show amidst the ongoing Israel-Hamas conflict in Gaza. This has resulted in an increase in demand for weapons and has made airspace closure and longer flights more expensive for some airlines. The Dubai Airshow is an important event in the aviation industry, and in previous years has seen significant commercial deals for jetmakers Airbus and Boeing, as well as providing an opportunity to gauge the mood of arms buyers. 


The ongoing war in Gaza is likely to reinforce the demand for weapons, with the United States and its allies rearming Ukraine against Russia. Washington has promised to supply Israel with the necessary weaponry to fight against Hamas. This conflict could potentially hurt arms deals in the Middle East, with few immediate deals expected to be closed during the show. 


However, new industrial agreements or memorandums of cooperation could shed light on the geopolitical discussions taking place after the conflict. The event is expected to attract more than 1,400 companies from 95 countries, including four from Israel. The fighting has disrupted some commercial passenger travel, with airlines suspending flights to Israel due to the airport being targeted by Hamas rocket fire. As a result, tourism has also collapsed. 

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Travelers are canceling or postponing planned vacations to the Middle East and North Africa. The show is expected to yield orders that underline a recovery in demand for long-haul jets, with Emirates considering more Airbus, Boeing 787, or Boeing 777X aircraft. The main question mark lies in whether manufacturers can overcome supply-chain or certification problems to deliver their latest models to the region, particularly for the 777X. A new order from Emirates would be a boost for the 777X, which is already five years behind schedule. The capacity of carriers in areas looking to exponentially increase air travel, such as Saudi Arabia, may be impacted by the conflict, with some questioning whether it softens future growth plans. Demand from markets in parts of Asia has already been slightly impacted by the war, according to Emirates Chief Operating Officer Adel Al Redha. The Chief Executive of Jordan's national airline, which neighbors Israel, has reported a major drop in reservations, while the airline is now flying longer routes to avoid Israeli airspace, driving up operating costs. The show is still expected to yield orders that underscore a recovery in demand for long-haul jets, with Saudi Arabia's Riyadh Air potentially unveiling a major order for narrow-body planes, and Flydubai, Etihad, and India's IndiGo also in the running for deals ahead of the event.

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