All products have a conventions tied to them, and generally the convention business is a multi billion dollar business. The prime example is Las Vegas which people think about gambling, but its most important business is the convention business which draws people to gamble. In the world of aviation, the biggest airshows are in England and France but closing behind is Dubai. At the aviation convention not only are the new products offered, but some deals are designed to be signed. The more deals that are signed and announced the more important the trade show.
In an article by Aya Batrawy and Isabel Debre of the Associated Press, the Dubai Air Show included the announcement by Airbus of a sale to Indigo Partners of 255 new aircraft. Indigo Partners operates low cost passenger flights including Wizz Air, US Frontier, Volaris from Mexico and JetSmart. The 255 aircraft will cost about $30 billion.
In the world of military aircraft, for example the US spends over $8 trillion on the military, Russia has a fighter jet called Checkmate which costs $35 million less than the F-35. The company which is producing the Checkmate is United Aircraft Corporation which is a holding company of state owned Rostec. Production is expected to start in 2025.
Boeing, Lockheed Martin and Raytheon are at the show. Boeing was showing its new 777-9 passenger jet which will be both the world’s largest and fuel efficient twin-engine jet. The Middle East’s largest carrier Emirates has ordered 126 planes but delivery is not expected till late 2023.
Last year Israel formalized relations with the UAE and Isralei companies displayed their hardware including manned and unmanned naval and aerial drones.
Airlines are a multi billion dollar business and last year lost $138 billion, this year the International Air Transport Association forecasts a net loss of $11.6 billion and nearly $52 billion in losses.
Some of the passenger planes have been converted to freight planes to help with the bottlenecks in the supply system.
Linking to dividend paying stocks, all products tend to have cycles and conventions to highlight the expected next year. Whatever you invest in, one method to understand the industry in general is to read or watch or find information about the convention and then you will have an idea of where the industry is headed and what the expectations are. Conventions can be fun, but there are learning experiences to be had.
There are more questions than answers, till the next time – to raising questions.