Wheels up! Boeing sets a new course for the Middle East

0:11Hello and welcome to The Entrepreneurs on Monocle Radio, the show all about inspiring people, innovative companies and fresh ideas in global business. On today's programme, we're jetting off to the UAE for a look back at the big deals and major news from the Dubai Air Show. First, we hear from one of Boeing's top executives about the company's Middle East strategy. There has been an enduring trust in Boeing here, and it's just exciting to be in a part of the world where there's a can-do attitude. It's extremely important. And later in the programme, Monocle's golf correspondent, Inzman Rashid, will join me with a roundup of all the commercial action.

0:49Inz, what caught your eye in Dubai? Deals, deals and more deals on the tarmac at Dubai Airshow. More than$200 billion worth of airline and aircraft deals taking place in Dubai. It was pretty spectacular to see. More from Inz on that coming up on The Entrepreneurs with me, Tom Edwards.

1:18You're listening to The Entrepreneurs. The Dubai Airshow has just wrapped and its theme was The Future Is Here. The event was marked by record orders and brought together more than 200 aircraft and around 1 ,500 exhibitors, including Boeing. After a turbulent few years, the aerospace giant landed the show's biggest single deal with Emirates' new wide-body order. Monocle's Golf correspondent Inzmam Rashid caught up with senior vice president of the Boeing company and president of Boeing Global, Dr Brendan Nelson, at the event. Inzhi began by asking why the Dubai Airshow remains such an important moment for the company.

1:55As far as Boeing is concerned, to be back here at the Dubai Airshow in many ways is like a home away from home. Our company has eight decades of not a relationship but a partnership with the Middle East. and we have quite an immense presence in and commitment to the Middle East. We've got 700 employees across the region. The Dubai Airshow is the centrepiece in many ways of promoting the commercial aeroplane sector in the Middle East. We've got very significant relationships here with customers, with governments, suppliers, stakeholders, partners in universities, in innovation, research and development.

2:37And it's just exciting to be in a part of the world where across the region, whether you're talking about the United Arab Emirates or the Kingdom of Saudi Arabia or Qatar, Kuwait or Jordan, Bahrain and the many other countries in the region, there's a can -do attitude. And the other thing that's really important, and I say to people, and you've spent some time obviously in regions outside the Middle East, but I say to people, you need to come here. You need to see it, you need to feel it, and you need to hear it. And if you want an example of the enthusiasm and the confidence that's in this part of the world, the Dubai Airshow showcases not just unbelievable aircraft and emerging capabilities in aerospace, but also reflective of the vision and strategies being pursued by leadership in the region, of economic diversification, of tourism, infrastructure, innovation, research and development, sustainability.

3:35This is where it's happening. And particularly this region and this market as well, when we look around here and we see the big players on display using your aircraft as well, this market in particular, why is that so strong for Boeing? Why is it such an important market and a growing market for Bury? Well, firstly, as I said, you've got leadership across the region, the countries in the region that has a can-do attitude. There's a confidence that's driving economic and social development in the region. Our commercial market outlook for the region is for 3 ,475 planes over the next 20 years. We know we're going to have to recruit around 230 ,000 people to fly and support and crew those aircraft.

4:22We know that the growth each year in commercial aviation in the region will be about 3.9 % per annum and 4.4 % growth in passengers. And importantly, and a lot of people outside the region don't realise that within eight hours, you can fly to cover 80 % of the world population and 70 % of global GDP. And then in terms of being a market for us. We've got Emirates, it's the biggest 777 operator in the world. Qatar Airways, the biggest 787 operator in the world. And Fly Dubai is our biggest 737 MAX operator in the region. Then when you add to that, the support that we give in the defence space for C-17s, Chinooks, Apaches, tankers, F-15s, UAVs, and providing support to them in maintenance services and parts, and then add to that the work we do in partnering with nine universities, this and research and technology and developing the unmanned advanced air mobility space, it's extremely important.

5:30In terms of some of those big players that you mentioned, there's clearly now and still a lot of confidence in Boeing and what Boeing does. Have you felt that being on the ground here at the air show, that the confidence in Boeing is very much there from the big players? I can feel that confidence. There has been an enduring trust in Boeing here, whilst recognising that in recent years that have recent past, we've had quite significant challenges as we emerge from the global pandemic and all the consequences of that. If we go back seven or eight years, the two tragedies for the 737 and the grounding of it and the issues we had in production.

6:12But through all of that, this region, our customers in this region, the governments in this region have remained very committed to Boeing and supporting us. And the feel I have, I mean, you can contest it if you like, the feel I have and people have said to me, it's great to have Boeing back. And clearly we're a company that is turning and you've seen very significant improvements in our production quality and the safety of our products. certainly the rate of production has increased increasing confidence coming to us from the FAA as we go through our improvements to the quality of our production and as I say the delivery of our products and our customers themselves are saying these are the best planes we've had in years and the biggest challenge we've got with a backlog of 6 ,000 aircraft our biggest challenge is producing those planes as safely and as efficiently as we can.

7:08Is that what it feels like, but you're kind of at this kind of turning point. You're maybe, you know, kind of done all the reflecting, you've done all the kind of looking over the challenges of the last few years, and you're at a turning point now for the good. I do not want for one moment, your listeners, to think that there's any sense of overconfidence in this. We are confident in our people. We are confident in what we have done to address the challenges that we've had. We slowed our production rates significantly. We introduced six critically important KPIs for production quality, put it right across our commercial production line.

7:49We had stand downs at 70 ,000 of our staff across 20 manufacturing sites. We listened to our staff for their own ideas. We implemented the ideas they put forward. We heavily invested in tools and equipment, in extra training. We're putting training into our entry-level managers, the men and women who are actually managing small groups of teams in our production lines. We're heavily investing now also in our senior management. We changed our CEO in August 2024. Kelly Ortberg came in and he said there are four pillars upon which the future of this company is going to be built. The first, he said, is culture, the values and the behaviors, the way we treat one another, the way we treat and interact with our customers, our stakeholders, our suppliers, and drawing on the views and ideas of our staff.

8:40We now have five critical values informed by behaviours and that was his first priority. Second was to stabilise the company, both the balance sheet and the production line. Both of those have now occurred. The third is execution. We're working through the certification process on the 737 variants, the 777X and also the defence contracts, which have been a problem for us. And it's fair to say that in recent years, we've let down our customers at times and we've eroded trust. I'm confident now that that is certainly being rebuilt. And the fourth thing that he said is we've got to think about the future.

9:20So at the same time as we emerge from our financial challenges and other challenges that we continue to invest heavily in research and development and thinking about the future of aviation. so they're the things that we're doing and we have done and i'm confident we're on the right track just on that point of reflection that you've had over the last few years have you had to have very frank discussions to be very honest with yourselves internally in order to try and get out on the other side you know as someone who's come from a political background you know those conversations are often had at very high levels of government.

10:00Have you had to do that within the organization here as well? Of course, of course we have. And you would expect that to be the case, very frank, very open, and to be transparent in leadership at a sense at times to speak about our own concerns, the things that reflecting on the past, making sure that we look at where did we not do things as well as we should have done? What should we do better? How can we do it better? And as I said earlier, how do we relate to one another? How do we relate to and communicate effectively, transparently with our customers? And we've also had changes in personnel, which you would expect in this sort of environment.

10:44I've got to say that I'm very proud. I'm very and ten years essentially for the Boeing company. This has overwhelmingly been a company that's transformed humankind in so many ways, advanced our standard of living, things that too often we take for granted, enabled people to fly, to see their families and friends, to take, if you like, Middle Eastern culture to the world and bring the world to the Middle East, take people to space, and not at times without setbacks and failures, which we recognise. But I'm very proud of the Boeing company and I'm proud of the way that over this, certainly the last two years, we have responded to the challenges that we've had.

11:30Let's talk about planes. Let's talk about orders and deliveries as well. Where are we with kind of latest orders? When can we expect delivery of some that have been significantly delayed? When can we physically see these planes arriving where they should be on time? The order book is very full, 4 ,400 737s in the backlog. We've got a total backlog of just over 6 ,000 planes now. And our delivery schedules are in the early 2030s. So in one sense, that's a good problem to have with over half a trillion dollars in backlog. But in another, for our customers who want aircraft as soon as practicable, It means that we work with leasing companies and look for all sorts of options to help our customers until their planes are being delivered.

12:21What's down the line in terms of product innovation for Boeing? What can a Monocle subscriber expect from Boeing down the line? In terms of something, a bit of innovation, something a bit different, what are you focusing on? Will the future of air travel? In terms of looking at the future, obviously we are thinking about the next plane. We have to make sure that we're ready, that we're financially ready to invest in another plane. We have to make sure the market is going to be ready and the market is not yet ready for that. And we also need to make sure that we get at least a 25 % efficiency gain in terms of the next plane.

12:58Advanced air mobility, autonomy, artificial intelligence, improved experiences for passengers in aircraft, the introduction of an autonomous air taxi we we're developing one uh whisk in urban environs we're doing a lot of work with regulators throughout the world introducing unmanned aerial vehicles advanced air mobility in contested airspace that's a controlled airspace i should say they're the kind of things that we're looking at you can expect over the next generation that the aircraft that people fly and will look kind of pretty much similar to the ones that we've got today, but with a lot of advancements of technology that's within them and improvements to the passenger experience in terms of comfort and everything from luggage turning up and good food that you want being delivered.

13:49Finally, from your perspective, you know, you've had such a varied career, but a long political one as well. How is it being part of this organisation, which has had its challenges looks like it's kind of getting out on the other side on track for the highest annual delivery since 2018 but kind of bringing your political background and and your your experience to this organization how has that been for you kind of going through the notion of of dealing with the challenges and also looking towards the future that that what what Boeing has to offer? Well, I have been very proud and humbled to play my small role in helping the Boeing company grow and deal with the challenges that we have had.

14:37I came to the Boeing company and it started in February 2020. I wanted to join the Boeing company because early in my life, I decided I wanted to use my life in a way that makes a difference to the lives of others. And this company overwhelmingly over more than a century, as I said, has been an enormously positive contributor to advancing humankind. And that's how I felt about it. In terms of, I feel very proud to wear a Boeing badge, to be part of the leadership of the company. And what I've learned is that our CEO, Kelly Ortberg, has an engineering background, a lot of experience in the aerospace and, of course, in business.

15:20But he's absolutely adamant that we've got to get things done. We've got our science and engineering, which is the basis of the products that we produce, and get our products produced and get everything done. But he's equally emphasising and assessing people on their values and behaviours. That's the sort of company I'm proud to work with. That was the Senior Vice President of the Boeing Company and President of Boeing Global, Dr. Brendan Nelson, in conversation with Monocle's Inzmam Rashid.

15:58You're listening to The Entrepreneurs. Well, I'm delighted to say we're going to talk more about the Dubai Airshow now with a man who was there on the ground. Monocle's golf correspondent Inzmam Rashid is here. Hi, Inzhi. How are you doing? Very well, thank you, Tom. Yeah, fresh off the tarmac at Dubai Airshow, which was absolutely buzzing. And also, it's one of those places where you really have to take a few days afterwards to adjust because your ears are ringing from all the acrobats that are happening up ahead. Now, Inzi, we heard from Brendan Nelson, really fascinating to catch up with him.

16:31But there were so many key figures from aviation. It's a really interesting opportunity, isn't it, Dubai Airshow, to, I guess, just to kind of talk shop with some of the key movers and shakers. Yeah, it really is. And for Boeing in particular, you know, we heard from Brendan Nelson there a bit about Boeing and the turbulent time that they've been through over the last few years. And I think what was quite interesting about that specific conversation and also about Airbus as well, the other major plane manufacturer, is that they've been quite honest about the difficult times that they've had over the last few years.

17:05And it feels, well, particularly from this air show, it felt actually that confidence in Boeing and Airbus has been greater than ever before, particularly from the airlines. We saw that with the sheer number of deals and orders that were put in by some of the major airlines here in the Gulf. And I think particularly speaking to Brendan Nelson, he was talking about this seems like a bit of a fresh start, a real turning point for Boeing moving forward. And it's interesting, Izzy, it's not just about deals by commercial carriers for commercial aircraft. Defence, a huge sector, a big chunk of that huge figure you mentioned at the top of the show was defence.

17:43And there's all these other narratives, of course, not just the defence deals. Also, you know, which nations are present, who's not involved. There are all kinds of kind of interesting stories wherever, I guess, on the ground, on the tarmac at Dubai you looked. Yeah, you're so right. I'll just go through some of those top deals for you, Tom, just to get an idea of what actually happened at Airshow in terms of kind of financial transactions. On the first day, Emirates came and started with a bang. They ordered$38 billion worth of Boeing 777-9s. That was 65 additional 777-9 aircrafts ordered on day one.

18:17And then they ordered an additional eight Airbus A350-900 aircrafts. That was around$3.4 billion US dollars. fly dubai also made a huge order as well they spent around 24 billion dollars on airbus on the a321 neos so that's the kind of narrow body aircrafts and also spent around 13 billion dollars on 737 maxes boeing 737 maxes around 75 of them and you're right there were huge defense deals happening as well. Edge Group, which is actually the local UAE weapons manufacturer, a huge defense group, which is now reporting around$20 billion worth of sales over the last year. They've grown hugely and are now exporting a lot of their defense systems across the world.

19:10They actually made a landmark cooperation agreement with Indonesia's defense group, and it's the largest international contract to date that they've ever done, which is worth about seven billion US dollars. They also had a lot of their weaponry, their defense mechanisms on show at the air show. And that particular exhibition gained a lot of attention, particularly from the UAE royal families. The crown prince of Dubai was there. The president of the UAE, Mohammed bin Zayed, was also there visiting their stand in particular. And you're right, when we talk about who specifically wasn't there this was a conversation that was had prior to the air show about whether Israel would have a presence at Dubai air show 2025 it wasn't actually addressed properly before the air show by anyone official but there was no Israeli presence at this year's Dubai air show 2025 for very obvious reasons in the region but I felt that Dubai and Dubai airports and the other organizers, the government as well, clearly wanted to make a bit of a stance and not include Israel in this air show.

20:21I mean, we did see Russia there and we saw actually kind of Russian Air Force and Russian defense systems, as well as aviation also on display, many Ukrainian systems on display as well. So the big highlight in terms of who wasn't allowed to be there was Israel, but it wasn't really spoken about that much before and at the air show as well. And, Lindsay, one thing just to quickly reflect on, of course, I'm sure many observers from without will have seen the shocking footage of this jet crash involving this Indian fighter jet, of course. And it was pretty extraordinary. You know, the event kind of resumed fairly soon after.

21:01I mean, it was a display of efficiency dealing with this terrible disaster. I mean, what was the narrative around that on the ground? I mean, these events, these things do happen and there is always attendant risk especially with some of this older military equipment but that's certainly something that kind of got the headlines for unwanted reasons right yeah so this was on the final day of the air show and right up until then everything was running very smoothly unfortunately on on the final day an indian tejas jet crashed whilst trying to fly and do some of the the kind of pretty intense maneuvers that we see at air shows like this.

21:40There were huge gasps. There was absolute disbelief. There was shock through the crowd. And this jet essentially trying to do some of those maneuvers crashed into the ground. The pilot couldn't eject and sadly died as a result of it. Air Force wing commander Naman Shail was the pilot who passed away. But what was remarkable by Dubai Air Show and the authorities there is that, yes, the authorities got to the scene very quickly, rapidly kind of cleared all of the debris. 20 minutes later, the air show carried on. They continued. And Dubai Airport said that actually after they had some very serious discussions within those 20 minutes, they actually felt that it was the right thing to do to continue.

22:29And before we knew it, there were other fighter jets up in the sky doing some of those moves. But you can imagine that the atmosphere was pretty tense after that. And for 19 shows, 19 Dubai air shows, the CEO of Dubai Airports was telling me that that was the first ever incident that they've ever faced. Yeah, well, you mentioned him there, Dubai Airports CEO Paul Griffiths. He's been on Monocle Radio before, of course, Inzi. you were talking to him and I know I think we can actually hear a little bit of your conversation just tell us what else alongside exactly you know the challenges the unknowns as well that can beset an event like this tell us what you were chatting to Paul about we jumped in straight with a conversation of deals he actually mentioned that we were going to just crush the hundred billion dollar mark since then it's doubled and we've exceeded 200 billion dollars so I don't know who gave him the wrong figure or maybe he just didn't know that there was 100 billion dollars worth of deals still to come down the road.

23:24So that's where we started the conversation. Well, obviously, the lifeblood of an airport is having the aviation activity. And when Emirates ordered the 65777 900s, that's a great fillet for confidence in the aviation infrastructure here. Then, of course, we've got the Fly Dubai announcement of 150 A321s, which I think is going to be a game changer for fly Dubai plus 100 options. I'm excited because that just opens up a whole era of more cities and more countries and more connectivity for Dubai. But I'm secretly also thinking, where on earth are we going to find space for all these planes? But I mean, it's a great problem to have.

24:06And I can promise you, we will find a solution to make sure that they operate very efficiently and effectively. And they're there to deliver great customer service and a wonderful product to yet more corners of the globe. Let's talk about a deal that was also made with Dubai airports. The UK government arrived here and decided to say that they were willing to invest $3.5 billion into the new airport when it comes around. We spoke extensively about DWC, but how important is it to have this FDI, particularly from a backer like the UK, who is increasing its ties with the UAE consistently and such a huge sum as well.

24:46What will that do? It's a wonderful statement of confidence in the project. It's also very, very advantageous and practical for us because there's a huge amount of British expertise that exists in so many companies in high tech, in thinking about things differently and all the systems and expertise that we'll be able to use from British sources financed by the British government I think is a massive vote of confidence in the project. And hopefully also it will incentivize other nations to come forward with similar deals. This is such a huge enterprise. It's going to rely on a massive amount of international partnership from all corners of the world.

25:27And we're delighted that the British have kickstarted it for us. It will be a real help in getting all the finance together that we need to build this enormous project. What I find interesting though is we spoke extensively about the innovation, the technology that's arriving to DWC. And also it has arrived at DXB already and will continue to in the years to come. I want to get your thoughts though on the planes that you've seen on the tarmac and some of the new planes like the Etihad Long Range plane that's arrived fresh. And some of the innovative products as well from some of the major airlines.

26:02When you think about the balance of what you're providing at the airport, but also what the airlines are providing in terms of innovation and technology? Do you see that there is a good balance and that you're moving at the same pace? And does it excite you what you're seeing? Oh, the technological developments of aircraft has always fascinated me. And what I think is going to be a game changer for the future are these narrow body aircraft with huge endurance. I mean, you've seen that Qantas have got the A350-1000 that can actually fly nonstop from London to Sydney. That's going to be very exciting.

26:36but you know what we've actually seen here is aircraft that are smaller that have a manageable number of seats to sell that could operate now to some of those secondary airports you know and i think that the good thing about that is that those smaller aircraft can fly up to nine hours so there's all of northern europe all of those secondary airports all over those countries that I've got regular service to short call destinations, but now we'll be able to connect those cities directly into the Dubai hub. It will add a huge amount of opportunity for more cities to be connected directly here, both north, south, east and west.

27:17So that's a really good opportunity. The other interesting technology is the e-VTOLs that have been displayed here. And seeing and not hearing the Joby Aviation aircraft has been fantastic. I mean, that aeroplane is so quiet. We often associate aviation with a lot of noise, but actually I think this is breaking that particular paradigm. It engineered a lot of solutions into the propulsion system to make sure it's whisper quiet. And I think it's going to be a game changer. When they get to a version 3.0, that's going to have greater payload, longer range, faster speed. We're all going to be using air taxis to get from A to B to avoid the traffic.

27:58and I think it's going to be a very exciting time for personal mobility. Well, that was Paul Griffiths, the CEO of Dubai Airports, talking to Inzman Rashid at the Dubai Airshow. And Enzi, before we let you go, well, I know you're never a man to miss out on a nice gala dinner if you can get the tickets. I gather this year's Dubai Airshow Jamboree wrapped up in familiar style. Yeah, tuxedo was laundered and fresh to go and the hottest ticket in town it was that the gala dinner at the Atlantis on the Palm I was invited and it was a beautiful evening the food was fantastic we heard music from Teddy Swims Mark Ronson but what I have to say was the highlight and just because we've spoken with Paul Griffiths was his silver glittery tuxedo that he had on which was just phenomenal to see This man who's very pretty, you know, he's got one of the busiest jobs in the world in this silver tuxedo.

28:59It was an absolute spectacle. You're going to have to up your game, Inz, aren't you, next time? Get one of those velvet ones maybe next time? Maybe, yeah. I'm sure you've got a few of them. Maybe I'll lend one of yours. Lovely stuff. Inz, ma 'am, thanks for reporting from Dubai Airshow. Great to chat with you, as always. That's Monocle's golf correspondent in Dubai, Inz, ma 'am, bringing us all the latest from the Dubai Airshow. If you want to find out more about Dubai Airports, by the way, of which, of course, Paul Griffiths, from whom you heard earlier, is the CEO, you can do that. Just head to DubaiAirports.ae and find out more.