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- [00:00]
Paul Griffiths
Foreign.
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Tom Edwards
Hello 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 program, 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.
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Dr. Brendan Nelson
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.
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Tom Edwards
And later in the program, Monocle's golf correspondent Insman Rashid will join me with a roundup of all the commercial action. Insi, what caught your eye in Dubai?
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Insman Rashid
Deals, deals and more deals on the tarmac at Dubai airshow. More than 200 billion doll worth of airline and aircraft deals taking place in Dubai. It was pretty spectacular to see more.
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Tom Edwards
From NZ on that coming up on the Entrepreneurs with me, Tom Edwards. You're listening to the Entrepreneurs. The Dubai Air show 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 1500 exhibitors, including Boeing. After a turbulent few years, the aerospace giant landed the show's biggest single deal with Emirates new widebody order monocles. Golf correspondent Insmam Rashid caught up with senior vice president of the Boeing Company and President of Boeing Global, Dr. Brendan Nelson @ the event. Insi began by asking why the Dubai Air show remains such an important moment for the company.
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Dr. Brendan Nelson
As far as Boeing is concerned, to be back here at the Dubai Air show 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 Air show is the centerpiece 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. And 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 Air show 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. This is where it's at me and.
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Insman Rashid
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 Boeing?
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Dr. Brendan Nelson
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. We 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 realize 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. Carter 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 C17s, Chinooks, Apaches, tankers, F15s, 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 in terms of some.
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Insman Rashid
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?
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Dr. Brendan Nelson
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 drowning of it and the issues we had in production. But 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, this is 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.
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Insman Rashid
Is that what it feels like, that 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.
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Dr. Brendan Nelson
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 rate significantly. We introduced six critically important KPIs for production quality, put it right across our commercial production line. We had stand downs of 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, we now have five critical hate values informed by behaviors. And that was his first priority. Second was to stabilize 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 Defense 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 got to think about the future. So 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.
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Insman Rashid
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 a very high levels of government. Have you had to do that within the organization here as well?
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Dr. Brendan Nelson
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. It 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 our. And communicate effectively, transparently with our customers? And we've also had changes in personnel, which you would expect in this sort of environment. I've got to say that I'm very proud. I'm very proud of this company. I think back over 110 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, enable 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 recognize. 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.
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Insman Rashid
Let'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?
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Dr. Brendan Nelson
The order book is very full, 4400 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 2000 and 30s. 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 plans are being delivered.
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Insman Rashid
What'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?
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Dr. Brendan Nelson
In terms of looking at the future, obviously we are thinking about the next plane. We have to make sure that we are ready, that we are 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. Advanced air mobility, autonomy, artificial intelligence, improved experiences for passengers in aircraft, the introduction of an autonomous air taxi. We're developing one WISK 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 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 in 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.
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Insman Rashid
Finally, 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 organization, 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 your, your experience to this organization. How has that been for you? Kind of going through the notion of dealing with the challenges and also looking towards the future, what Boeing has to offer.
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Dr. Brendan Nelson
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. I 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. 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. But 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 behaviors. That's the sort of company I'm proud to work with.
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Tom Edwards
That was the senior Vice president of the Boeing Company and president of Boeing Global, Dr. Brendan Nelson, in conversation with Monocle's Insman Rashid. You're listening to the entrepreneurs. Well, I'm delighted to say we're going to talk about. Talk more about the Dubai Air show now with a man who was there on the ground. Monocles Golf correspondent Insamam Rashid is here. Hi, Insy, how are you doing?
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Insman Rashid
Very well, thank you, Tom. Yeah, fresh off the tarmac at Dubai Air show, 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. The acrobats that are happening.
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Tom Edwards
Up ahead now. Insie, we heard from Brendan Nelson. Really fascinating to catch up with him, but there were so many key figures from aviation. It's a really interesting opportunity, isn't it, Dubai, our show, to, I guess just to kind of talk shop with some of the key movers and shakers.
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Insman Rashid
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, other major plane manufacturer, is that they're being quite honest about the difficult times that they've had over the last few years. And 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 frame fresh start, a real turning point for Boeing moving forward.
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Tom Edwards
And it's interesting is 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. And there's all these other narratives, of course, not just the defence deals. Also 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.
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Insman Rashid
Yeah, you're so right. I'll just go through some of those top deals for you. Tom, just so you get an idea of what actually happened at Air show 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 nines. That was 65 additional 777 nine aircrafts ordered on day one. And then they ordered an additional eight Airbus A350, 900 aircrafts. That was around US$3.4 billion. Fly Dubai also made a huge order as well. They spent around 25, $4 billion on Airbus on the A321neos. So that's the kind of narrow body aircrafts and also spend around $13 billion on 737 Maxs. Boeing 737 Maxs, 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. They 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 US$7 billion. 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, 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. I 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.
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Tom Edwards
And insy 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 you know, it was pretty extraordinary. You know, the event kind of resumed fairly soon after. I 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 you know, 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?
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Insman Rashid
Yeah. So this was on the final day of the air show and right up until then, everything was running very smoothly. Unfortunately, on the final day, an Indian Tejas jet crashed whilst trying to fly and do some of the kind of pretty intense maneuvers that we see at air shows like this. There 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 covers Commander Namansh Sayel was the pilot who passed away. But what was remarkable by Dubai Air show and the authorities there is that, yes, the, the authorities got to the scene very quickly, rapidly kind of cleared all of the debris. Twenty 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'd actually felt that it was the right thing to do to. And 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.
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Tom Edwards
Yeah, well, you mentioned him there. Dubai Airport CEO Paul Griffiths has been on Monocle Radio before, of course, Insi. 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 along the. Exactly, you know, the challenges, the unknowns as well that can be set an event like this. Tell us what you were chatting to Paul about.
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Insman Rashid
We jumped in straight with the conversation of deals. He actually mentioned that we were going to just cross the $100 billion mark. Since then, it's doubled and we've exceeded $200 billion. So I don't know who gave him the wrong figure, or maybe he just didn't know that there was $100 billion worth of deals still to come down the road. So that's where we started the conversation.
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Paul Griffiths
Well, obviously the lifeblood of an airport is having the aviation activity. And when emirates ordered the 65, 777 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 flydubai, plus 100 options. I'm excited because that just opens up a whole era of more cities and more countries and, 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 and 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.
- [24:19]
Insman Rashid
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 bwc, 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 is, well, what will that do?
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Paul Griffiths
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 voter 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 and 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.
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Insman Rashid
What I find interesting though is we spoke extensively about the innovation, the technology that 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 other innovative products as well from some of the major airlines. When 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 is a good balance and that you're moving at the same pace and does it excite you what you're seeing?
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Paul Griffiths
Oh, the technological development 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, you've seen that Qantas have got the A350 1000 that can actually fly non stop from London to Sydney. That's going to be very exciting. But 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. 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 have got regular service suits, 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. So that's a really good opportunity. The other interesting technology is the EVTOLs 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. They've 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 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. And I think it's going to be a very exciting time for personal mobility.
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Tom Edwards
Well, that was Paul Griffiths, the CEO of Dubai Airports, talking to Insman Rashid at the Dubai Air Show. And Insi, 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 Air show jamboree wrapped up in familiar style.
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Insman Rashid
Yep, 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. It was an absolute spectacle.
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Tom Edwards
You're gonna have to up your game, Insie, aren't you? Next time get one of those, one of those velvet ones.
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Insman Rashid
Maybe next time maybe, yeah, I'm sure you've got a few of them. Maybe I'll lend one of yours.
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Tom Edwards
Lovely stuff. Thanks for reporting from Dubai. Asha, great to chat with you as always. That's Monocles Golf correspondent in Dubai in Zamam, bringing us all the latest from the Dubai Air Show. 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. And that's all we have time for on this. This episode of the Entrepreneurs will be back at the same time next week. The program is produced by Laura Kramer with audio editing by Jack Dewars. Special thanks to Insi for his reporting. You can listen again and find out more at the website monocle.com whilst you're there, why not subscribe to the magazine and ensure you can read on paper more about better businesses every month if you'd like to get in touch. Do email Laura. She's on lrkonocle.com I'm Tom Edwards. Goodbye, and thanks for listening to the entrepreneurs.