A year ago yesterday, Emirates Airline and Australia's Qantas launched their partnership with a breathtaking double-A380 fly-by over Sydney Harbour.
Unsurprisingly, Emirates is already a bigger winner in an alliance that resulted in a switch of the stopover for Qantas long-haul flights to Dubai from Singapore, helping to boost passenger traffic at Dubai International Airport by 11.7 per cent in February compared to a year earlier.
Government data last week also showed that Australasia was the fastest-growing market for passenger traffic at Dubai International, increasing by 30.5 per cent on the back of the tie-up.
Emirates has already leveraged its relationship with Qantas to expand its market share in Asia-Pacific. In February it signed a codeshare agreement with Jetstar, Qantas’s low-cost unit. Emirates said the agreement would give its passengers access to 27 new routes and six new destinations in Australia, New Zealand and Asia.
“Qantas needs Emirates more than Emirates needs Qantas,” said Will Horton, a senior analyst at the Sydney-based Centre for Aviation (Capa).”Emirates certainly had no problems being successful in Australia before the Qantas partnership.”
The Australian carrier is struggling with financial woes, ironically brought on by fierce competition from Gulf carriers including Emirates.
Known as the flying kangaroo, Qantas in February reported a loss of A$235 million (Dh771.4m) for the second half of last year, compared to a profit of A$109m a year earlier. The company said it would cut 5,000 jobs from its total workforce of 32,000.
“Qantas is a structural mess and no one wants to touch it with a bargepole. And quite rightly, too. Qantas represents everything that is wrong in how to run an airline,” said Saj Ahmad, the chief analyst at StrategicAero Research.
However, in a sign that Qantas has come to accept the need for a full reckoning, the airline has begun to cut costs. Qantas said it was planning to sell or defer the purchase of 50 aircraft and defer orders for eight Airbus A380s and three Boeing 787 Dreamliners that it had ordered for Jetstar.
“The situation with Qantas is severe, but there is a path ahead, although that requires much restructuring, which Qantas is starting to do,” said Mr Horton.
Hit by high fuel costs, aggressive competition and slow international demand, Qantas also faces tough competition at home, highlighted by a price war with Virgin Australia, a partner of Etihad Airways.
“Any increased exposure in Virgin will mean Etihad will be more exposed to any turbulent times ahead, but Etihad has made clear this is a long-term investment,” said Mr Horton.
However, unlike Virgin Australia, which is majority owned by Etihad, Air New Zealand and Singapore Airlines, Qantas by law must stay primarily in Australian hands.
James Hogan, the Etihad chief executive, has said the Abu Dhabi carrier might increase its stake in Virgin. Yesterday, Singapore Airlines raised its stake in Virgin to 22.1 per cent from 19.8 per cent.
“Qantas is an inept and inefficient dinosaur like many European Union and United States airlines, and Etihad can push Virgin Australia to hit Qantas where it hurts while also poaching international traffic,” Mr Ahmad said.
The Australian government is weighing the removal of a 49 per cent cap on foreign ownership in Qantas, a proposal that is being challenged by opposition parties such as Labor and the Greens.
“Emirates won’t be affected by Qantas’s ownership laws since Emirates has stated quite clearly it isn’t interested in buying any airline stakes – least of all Qantas,” Mr Ahmad said.
But the potential downside for their partnership, which lasts for another four years, is the arrival of an investor who would change the current status quo.
“Any potential future investor in Qantas would want Qantas to maximise its potential, which the Emirates partnership can help do,” said Mr Horton.
“But the risk is if an investor is an airline in an overlapping market, such as an Asian airline serving Australia and Europe. That airline may want some of Qantas’s Europe traffic routed away from Dubai,” he added.
However, despite Emirates’ lack of interest in investing in other carriers, its strategy is not written in stone.
The Emirates president, Tim Clark, said last month: “We have no plans at the moment to buy stakes in other airlines. I never say never because I’m not going to be always sitting here forever, so others coming after me may say that’s what they want to do. I don’t know.”
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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.”
Dhadak
Director: Shashank Khaitan
Starring: Janhvi Kapoor, Ishaan Khattar, Ashutosh Rana
Stars: 3
Killing of Qassem Suleimani
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
The biog
Born: near Sialkot, Pakistan, 1981
Profession: Driver
Family: wife, son (11), daughter (8)
Favourite drink: chai karak
Favourite place in Dubai: The neighbourhood of Khawaneej. “When I see the old houses over there, near the date palms, I can be reminded of my old times. If I don’t go down I cannot recall my old times.”
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
