(For other news from Reuters Middle East Investment Summit,
click on http://www.reuters.com/summit/MiddleEastInvestment12)
* Mideast defence revenue seen doubling to $4 bln in 2 years
* Gulf customers shopping for F-15 and F-18 jets - Boeing
* Boeing not in talks with UAE on fighter jet deal
* New 777X aircraft to be offered in near term
DUBAI, Nov 20 (Reuters) - Boeing expects to double
revenue from its defence and security business in the Middle
East over the next two years as recent turmoil in the region
drives up demand for arms.
Gulf Arab states and other Middle Eastern countries that
witnessed the Arab Spring uprising are "shopping" for new
high-tech military equipment as they swap out older weaponry and
invest in new capabilities, Jeff Johnson, president of Boeing
Middle East said at the Reuters Middle East Investment Summit.
The U.S. planemaker, which also makes fighter jets,
helicopters and anti-missile technology, expects to increase its
annual revenue from defence in the region to about $4 billion
over the next two years.
That would be part of a wider plan to lessen reliance on
U.S. government work, which is being squeezed by spending cuts.
Boeing's fighter jets as well as the U.S. company's C-17
military transport aircraft have been in strong demand. Last
year, Boeing signed a $29.4 billion deal to sell 84 F-15 fighter
jets to Saudi Arabia, as well as a big defence sale to UAE.
"A lot of customers are shopping for the F-15 and F-18 Super
Hornets and as we introduce more C-17s into the market, we will
continue to see interest in that strategic area too," Johnson
The Middle East accounts for a third of Boeing's
international defence business, Johnson said. This equates to an
annual revenue of about $2 billion.
Asked if demand in the region would result in a doubling of
this figure, Johnson said: "Yes, over the next couple of years.
There is so much interest over a wide range of products."
Revenue for Boeing's defence business was about $31 billion
last year and is expected to be about the same in 2012, with
about 18 percent from its international clients, Johnson said.
"It's a very competitive market. When we see the flattening
of defence budgets in Europe and U.S, emerging markets become
more important and clearly Middle East is up there."
Johnson said high oil prices coupled with threats to the
region were going to allow Gulf armed forces to upgrade their
The United Arab Emirates (UAE) had been expected to finalise
a $10 billion deal with Dassault to buy 60 of the
French group's Rafale jets, but talks faltered as the UAE said
the terms were uncompetitive.
Others have also been trying to sell their wares. British
Prime Minister David Cameron visited the UAE earlier this month,
hoping to get it to consider the BAE Systems-built
Eurofighter Typhoon fighter jet.
Boeing is not in active talks with the UAE on this deal.
"We have offered our platforms. If one of those fits the
bill, we will certainly talk to the customer. But we are not in
any kind of active discussions," Johnson said.
Boeing has offered its fighter jets to other Gulf states
including Kuwait, Qatar and Saudi Arabia. Egypt has also been a
top customer for Boeing in defence and commercial planes, and it
has strong trade relations with Jordan and Iraq.
777X IN NEAR-TERM
Johnson dismissed concerns that airlines may opt for rival
Airbus' A350-1000 passenger jet if the new version of
Boeing's popular 777 plane is delayed.
"We will have several variants and improvements for the 777
in place before the A350-1000 even hits the market," he said.
Boeing has not yet offered the new version of the 777,
provisionally called the 777X, though carriers such as Emirates
and British Airways have been planning for
it to enter service by the end of this decade.
Boeing appears at least a year away from offering a new
version of the 777, Reuters reported this week.
"I think you'll see it in the near term. I don't know if
near term is tomorrow, next year or two years. But we are going
to stay very close to our customers."
"Our strategy is to stay close, see what they need and we
will roll that out," Johnson said.
Tim Clark, President of Emirates, the largest
customer of the 777, said in November it would consider
replacing its planned fleet of 175 Boeing 777s with the 777X.
"These comments were very reassuring," said Johnson.
"There is demand for the 777X, but what this really comes
down to is the trade-off," he said, suggesting discussion are on
the changes that are being asked for by the customers and what
the planemaker can offer.
He added that Qatar Airways and Abu Dhabi's Etihad Airways
will have a big role in the decision on the new stretched
version of the Dreamliner, the 787-10.
(Additional reporting by Alexander Smith and Amran Abocar;
Editing by Alexander Smith and Mark Potter)