It used to be about big planes in the Middle East. Now it’s about small planes in Asia.
The rampant aircraft buying of the past decade by Emirates Airline, Etihad Airways and Qatar Airways has helped to form the new hubs for long haul East-West travel.
Now the focus is switching to the spokes – and the small single-aisle planes that service them.
Gulf carriers are unlikely to be getting their chequebooks out in a big way at Farnborough this week as the record spending spree of recent years slows.
But smaller airlines from India, China and elsewhere in Asia are expected to help boost the order books of rival manufacturers Boeing and Airbus.
The bi-annual Farnborough International Airshow gets under way today amid a backdrop of faltering growth and increased competition on many international routes.
The recent cancellation of an order for 70 Airbus A350s by Emirates underscores weakening confidence in an industry worried about overcapacity and the threat of rising fuel costs amid increased tensions in Iraq and elsewhere in the Middle East.
Neither Emirates nor Etihad are expected to make aircraft purchase announcements at Farnborough, their spokespeople confirmed.
While Tim Clark, the chief executive of Emirates is at least due to attend, James Hogan, his counterpart at Etihad, is not.
Orders worth more than US$200 billion were agreed at last year’s Dubai Airshow, the largest in airshow history as Emirates, Etihad and Qatar snapped up dozens of new aircraft from the two big plane makers.
For more than a decade, the requirements of the Gulf carriers have helped to shape the look and feel of new aircraft from Boeing’s Dreamliner to the double decker A380 made by Airbus.
But with the region’s three big carriers having spent heavily in recent years to meet their aggressive growth targets, the momentum may now be slowing.
Still, Boeing issued an upbeat projection of future plane demand ahead of the opening of the Farnborough show.
It predicts demand for 36,770 airplanes worth some $5.2 trillion over the next 20 years – up 4.2 per cent from last year.
Significantly, while the past decade of airplane production has been about big planes in the Gulf, the next one is more likely to be defined by small planes in Asia.
“Based on the overwhelming amount of orders and deliveries, we see the heart of the single aisle market in the 160-seat range,” said Randy Tinseth, the vice president of marketing at Boeing Commercial Airplanes. “There’s no question that the market is converging to this size.”
Without Gulf airlines to make the headlines, the taxation and regulation-hobbled carriers of Europe lack the financial clout to invest heavily in their fleets.
Last week the International Air Transport Association (Iata) called on European governments and regulators to boost the region’s competitiveness by boosting connectivity.
“The region’s airlines are overtaxed and onerously regulated,” said Tony Tyler, Iata’s director general and chief executive. “They suffer from a chronically mismanaged air traffic management system, insufficient air capacity and infrastructure costs that are simply too expensive. It’s time to do something about it.”
Middle East carriers are expected to generate average margins of 2.6 per cent this year according to Iata – double that of Europe, where the strains of increased competition in the industry are starting to show.
Air-France KLM issued a profit warning on Tuesday after reporting a decline in average fares last month that it said reflected “the overcapacity on certain long-haul routes, notably North America and Asia, with the attendant impact on yields”. The following day Lufthansa revealed a new strategy as a response to increasingly fierce competition from Middle East carriers, which could include a long-haul budget service.
“We don’t want to be driven by change in the aviation sector; we want to be among the drivers of it,” said the Carsten Spohr, Lufthansa chief executive. “But doing so demands bold steps forward: our market is no place for half measures.”
scronin@thenational.ae
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Seemar’s top six for the Dubai World Cup Carnival:
1. Reynaldothewizard
2. North America
3. Raven’s Corner
4. Hawkesbury
5. New Maharajah
6. Secret Ambition
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.”
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
FIXTURES
Fixtures for Round 15 (all times UAE)
Friday
Inter Milan v AS Roma (11.45pm)
Saturday
Atalanta v Verona (6pm)
Udinese v Napoli (9pm)
Lazio v Juventus (11.45pm)
Sunday
Lecce v Genoa (3.30pm)
Sassuolo v Cagliari (6pm)
SPAL v Brescia (6pm)
Torino v Fiorentina (6pm)
Sampdoria v Parma (9pm)
Bologna v AC Milan (11.45pm)
