Description of the firm

Boeing is the world's leading aerospace company and the largest

manufacturer of commercial jetliners and military aircraft combined.
Additionally, Boeing designs and manufactures rotorcraft, electronic and
defense systems, missiles, satellites, launch vehicles and advanced
information and communication systems. The company also provides
numerous military and commercial airline support services. Boeing has
customers in more than 90 countries around the world and is one of the
largest U.S. exporters in terms of sales.

Headquartered in Chicago, Boeing employs more than 158,000 people

across the United States and in 70 countries. Which represents one of the
most diverse, talented and innovative workforces anywhere. ”More than
90,000 of their people hold college degrees--including nearly 29,000
advanced degrees--in virtually every business and technical field”

FOUNDERES

In 1903, two events launched the history of modern aviation. The

Wright brothers made their first flight at Kitty Hawk, N.C., and 22-year-old
William Boeing left Yale engineering college for the West Coast.
After making his fortune trading forest lands around Grays Harbor, Wash.,
Boeing moved to Seattle, Wash., in 1908 and, two years later, went to Los
Angeles, Calif., for the first American air meet. Boeing tried to get a ride in
one of the airplanes, but not one of the dozen aviators participating in the
event would oblige. Boeing came back to Seattle disappointed, but
determined to learn more about this new science of aviation.
For the next five years, Boeing's air travel was mostly theoretical, explored
during conversations at Seattle's University Club with George Conrad
Westervelt, a Navy engineer who had taken several aeronautics courses
from the Massachusetts Institute of Technology.
The two checked out biplane construction and were passengers on an early
Curtiss Aeroplane and Motor Co.-designed biplane that required the pilot
and passenger to sit on the wing. Westervelt later wrote that he "could
never find any definite answer as to why it held together." Both were
convinced they could build a biplane better than any on the market.
In the autumn of 1915, Boeing returned to California to take flying lessons
from another aviation pioneer, Glenn Martin. Before leaving, he asked
Westervelt to start designing a new, more practical airplane. Construction
of the twin-float seaplane began in Boeing's boathouse, and they named it
the B & W, after their initials

Civil aviation business environment analysis

The Gulf has always been known for holding the power of oil across the globe, more
recently the region's conflicts have changed its international spotlight into being an unstable part
of the world. However, the airlines of the Arab Gulf region are leading the world in aircraft
orders and have also heavily invested in airport infrastructure. (Arab Air Carriers Organization,
2006). Gulf airlines are rapidly expanding and moving towards playing a global hub role. The
"Dubai Inc" is an example of a highly successful, and clearly profitable, business venture.
Emirates Airline (operational name for the Dubai Inc”) offers a remarkable model for other
airlines in the region. Over little than a decade, Dubai has emerged as a global multimodal hub
and inbound tourism alone now accounts for 30% of its revenues. Many observers view with
disbelief the growth plans of not only Emirates Airline (whose current order book would make it
the biggest airline in the world within a decade), but also recent entrants like Etihad and Qatar
Airways, already with massive aircraft orders (Middle East Aviation, 2007). What also added to
this are the billions of dollar that are being poured into new, airport developments in a seemingly
unrealistic expansion surge.

Reasons behind this massive growth are supported by the following (Sheik Ahmed Bin Said Al-
Maktoum, chairman of Emirates group said)

* New aircraft orders announced in 2007 of a value of $50 billion.

* Of world's aircraft orders, 50% are from the Middle East.

* Airport expansion projects worth $ 36.8 billion.

* Regional passenger handling in 2006 increased by 22%.

* Airline capacity increase in 2006 by 12.2%, three the global growth.

* Infrastructure of project finance in the region increased by 50% in 2006.

* Biggest planned airport expansion projects anywhere in the world.

* Over 100 aircrafts added to fleet in the last two years.

* 400% seat capacity forecasted for LCC (Low Cost Carrier) by 2012.

* Expected capacity growth potential for the next five years is 80%.

Also another plus is the geographical region, the geographic location of Gulf based airlines leads
their route networks expansion largely toward Europe and Asia. Their perfectly positioned hub
are roughly equidistant between the Europe’s Northern Hemisphere and Asia’s Southern
Hemisphere and allows traffic to be easily routed through a central hub. As a consequence,
nearly 60% of the traffic carried by Arab Gulf airlines is to destinations in Europe and Asia,
whereas the Intra-Middle East traffic accounts for 34%, which can be counted as one of the
biggest intra-regional markets

According to the International Air Transport Association (IATA, 2006), the gulf is predicted to
be the fastest growing region for international traffic. Between 2007 and 2010, growth is around
6.9% passengers' annual which is above the 4.8% world average, (IATA, 2006). Also, since most
of the business and traffic is on the 6th freedom (The right to carry passengers or cargo from a
second country to a third country by stopping in one's own country), transporting passengers
from one point to another via the hub, the Gulf is witnessing a high mix of passengers whose
needs are for long and short haul flights. The fleet growth in recent years has been in the wide
body segment, consistent with the focus of the competitive gulf airlines to develop their long
haul network and carry more passengers. Boeing expects the gulf carriers as a whole to expand
by 5.5% per year till 2025 (Boeing, n.d.). Airbus is more positive in its forecast a growth of 6.2%
annually until 2025; the International Civil Aviation organization forecast Middle East passenger
traffic to grow at an average annual rate of 6.4% until 2015. (International Civil Aviation
Organization, 2000).

Massive infrastructure growth, high regional GDP and others are all contributing factors to the
boom in the sector, and there is plenty of room for more expansion. Regards to the challenges
faced by the aviation industry, there are difficult times with increasing fuel costs and inflation
measures hitting the airlines. The industry has suffered lots of losses in the past few years; and
airlines are shifting from the classical way of thinking to more creative and pro-active rather than
reactive ways. The Gulf airlines are preparing themselves for the future through better services,
competitive fares, exceptional add on services and other added values to gain the competitive
advantage.

Arab Air Carriers Organization. (2006). Retrieved April 5, 2008, from www.aaco.org

Boeing (n.d.). Retrieved April 5, 2008, from www.boeing.com

Department of Tourism and Commerce Marketing. (n.d.) Retrieved May 20, 2008, from www.dubaitourism.co.ae

Emirates Airlines. (n.d.). Retrieved April 5, 2008, from www.emirates.co

International Air Transport Association. (2006). Retrieved May 20, 2008, from www.iataonline.com

International Civil Aviation Organization. (2005). Retrieved April 5, 2008 from www.icao.int/ATWorkshop

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