President Tim Clark said he’s seeing 'signs of diminishing demand'. Pawan Singh / The National
President Tim Clark said he’s seeing 'signs of diminishing demand'. Pawan Singh / The National

Emirates looks to scale up flights to US after electronics ban hits demand



Emirates, the world's largest airline by international passengers, has started to ramp up some of its routes to the US that it had scaled back as a result of an electronics ban implemented in March by the Trump administration, and is looking to boost further capacity, its president said.

"We've already put Orlando back up to a daily and we've seen extraordinary high seat factors on Boston and Seattle on the one frequency," Emirates president Tim Clark said in an interview with The National. "I would say it's not going to be long before we start re-assessing a reintroduction of our capacity into the US… I'm hoping we can restore that fairly soon."

In March, the US announced that laptops, tablets, e-readers and other large electronic devices would be banned from cabins on flights from 10 airports, including those in Abu Dhabi and Dubai. The ban disrupted operations of a number of carriers, with the drop in demand translating into commercial losses.

The ban led to a fall in demand for the 10 airlines affected amid a slowing travel market that has been characterised by lower yields as a result of terror attacks in Europe and intense competition from low-cost carriers and changing business models of carriers leaning more on narrow-body planes. For Emirates the ban resulted in a dip on routes to the US by as much as 20 per cent, said Mr Clark.

The Geneva-based International Air Transport Association, which represents 275 carriers, had estimated the ban would cost passengers US$655 million in lost productivity, $216m for longer travel times, and $195m for renting loaner devices on board. In revised forecasts in June, the organisation said it anticipates net profit for global airlines to drop by about 10 per cent this year to $31.4 billion from 2016.

"It wasn't just the laptop ban, it was the Muslim country ban [by the US] which had a halo effect on the whole of our part of the world including west Asia; India, Pakistan and everywhere else, because a lot of people felt they weren't welcome there that they were going to have difficulties," said Mr Clark.

"There was a marked fall-off, particularly in the Indian subcontinent. The two [bans] taken together we saw major double-digit falls in demand for our services. That's why we pulled the Boston second frequency, the Seattle second frequency, the Los Angeles second frequency and reduced Orlando and Fort Lauderdale."

A survey by Campbell-Hill Aviation Group released this month shows that Emirates supported more than 104,000 jobs in the US and contributed about $21.3bn to the US economy in 2015. Emirates is the largest operator of the Boeing's wide-body 777 aircraft (mostly equipped with GE engines) as well as the double-decker A380 which also has US components and engines.

As of April 2017, Emirates operated 126 passenger flights a week to 12 airports in the US.

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The rules on fostering in the UAE

A foster couple or family must:

  • be Muslim, Emirati and be residing in the UAE
  • not be younger than 25 years old
  • not have been convicted of offences or crimes involving moral turpitude
  • be free of infectious diseases or psychological and mental disorders
  • have the ability to support its members and the foster child financially
  • undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
  • A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
The Perfect Couple

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Creator: Jenna Lamia

Rating: 3/5

Ms Yang's top tips for parents new to the UAE
  1. Join parent networks
  2. Look beyond school fees
  3. Keep an open mind
Retirement funds heavily invested in equities at a risky time

Pension funds in growing economies in Asia, Latin America and the Middle East have a sharply higher percentage of assets parked in stocks, just at a time when trade tensions threaten to derail markets.

Retirement money managers in 14 geographies now allocate 40 per cent of their assets to equities, an 8 percentage-point climb over the past five years, according to a Mercer survey released last week that canvassed government, corporate and mandatory pension funds with almost $5 trillion in assets under management. That compares with about 25 per cent for pension funds in Europe.

The escalating trade spat between the US and China has heightened fears that stocks are ripe for a downturn. With tensions mounting and outcomes driven more by politics than economics, the S&P 500 Index will be on course for a “full-scale bear market” without Federal Reserve interest-rate cuts, Citigroup’s global macro strategy team said earlier this week.

The increased allocation to equities by growth-market pension funds has come at the expense of fixed-income investments, which declined 11 percentage points over the five years, according to the survey.

Hong Kong funds have the highest exposure to equities at 66 per cent, although that’s been relatively stable over the period. Japan’s equity allocation jumped 13 percentage points while South Korea’s increased 8 percentage points.

The money managers are also directing a higher portion of their funds to assets outside of their home countries. On average, foreign stocks now account for 49 per cent of respondents’ equity investments, 4 percentage points higher than five years ago, while foreign fixed-income exposure climbed 7 percentage points to 23 per cent. Funds in Japan, South Korea, Malaysia and Taiwan are among those seeking greater diversification in stocks and fixed income.

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Profile

Co-founders of the company: Vilhelm Hedberg and Ravi Bhusari

Launch year: In 2016 ekar launched and signed an agreement with Etihad Airways in Abu Dhabi. In January 2017 ekar launched in Dubai in a partnership with the RTA.

Number of employees: Over 50

Financing stage: Series B currently being finalised

Investors: Series A - Audacia Capital 

Sector of operation: Transport

Election pledges on migration

CDU: "Now is the time to control the German borders and enforce strict border rejections" 

SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom" 

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EA Sports FC 25

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

UPI facts

More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions