They are at it again - the big beasts of the aviation jungle, Boeing and Airbus, slugging it out for sales.
It's a tough world out there for aircraft makers, or so they will tell you. Rising fuels costs, global recession, money getting tighter, airlines re-trenching or going out of business; the news is bleak.
But not for everyone. Last month Boeing's line was that it had stepped up the pressure on Airbus in the battle for control of the short-haul aircraft market.
In previous years, Airbus had gained and edge with the A320 series and was trying to tighten its grip with launch of the A320neo.
This is an upgrade of the plane popular with airlines from Abu Dhabi's Etihad Airways, to no-frills European carriers such as easyJet. So far there have been 1,289 firm orders.
But Boeing is gaining ground with its 737 Max, its revamping of a tried-and-trusted model.
Last month, Randy Tinseth, the vice president of marketing at the Boeing Commercial Airplane Company, announced that the company was focusing on achieving "parity" with the fuel-efficient A320neo, after notching up about 451 firm orders.
"We are on the right trajectory to catch them," says Mr Tinseth. "And that's where we want to be."
While he was talking, Airbus was telling the world about "sharklets" - yet another modification to the A320 series, easy to fit with a promise of even more fuel efficiency. The sharklet is a vertical wing tip extension that gives it greater lift for less fuel burn - words airlines love to hear.
Behind the rhetoric, however, there is a rather elegant little long-term dance going on between to two behemoths of aviation. Look at the business landscape they bestride and it suddenly becomes apparent that there is fodder enough for both.
Last year, Airbus ended the year with 64 per cent of aircraft ordered, leaving Boeing with just 36 per cent. Indeed, apart from a blip in 2006, Airbus has been leading Boeing on orders since 2001.
But in the first quarter of this year, the roles reversed, with Airbus scooping up a mere 20 per cent of orders and Boeing bouncing all the way back up to 80 per cent.
"Our biggest constraint right now is production slots," says John Leahy, the chief operating officer, customer, at Airbus, by way of explaining the sudden order gap. In other words, he is saying, "We're too busy fulfilling existing orders to look for more."
Boeing, meanwhile, is quietly predicting it is on course to regain the lead in orders this year. Analysts appear to agree.
"Boeing had a very impressive first-quarter 2012 order book. The company received net orders for 412 commercial airplanes in the first quarter versus 90 airplanes at Airbus," reports Zacks Equity Research in Chicago.
"Boeing's order book swelled in the quarter due to a stellar performance of its 737 Max, which received 301 orders. Despite a dull April order book, it appears the recovery in the commercial airspace market will be a prime driver of Boeing's fortunes in 2012. Boeing expects total revenue for 2012 to be in the range of US$78 billion [Dh286.5bn] to $80bn, of which $47.5bn to $49.5bn is expected to come from commercial airplane sales."
Airbus' fight-back opened with feigned disinterest, hence the "we're too busy" allusion.
Mr Leahy also says the 737 Max is not that good - it still burns 12 per cent more fuel per passenger than the A320neo, and that is the kind of fact airlines can not ignore. He also believes the orders gap is just a blip.
"I want to be back in that 40 to 60 per cent band," he says. "We'll be there before the end of the year."
But one look at the market reveals this is megaphone rivalry, not the roar of a fight to the death. The trends show both companies have every reason to feel quite happy when contemplating the future.
During the past 15 years, the demand for air travel has doubled, according to figures compiled by the UN's International Civil Aviation Organisation.
Market projections by Airbus indicate it will more than double again by 2030, from more than 5 trillion revenue passenger kilometres - a measure of the volume of passengers carried by airlines - last year to almost 13 trillion.
A look at the gross deliveries for both aircraft makers during the period also shows them unaffected by the major events of the last 15 years - the Asian economic crisis in 1998, 9/11 in 2001, the Sars epidemic in 2003 and the global financial crisis in 2008 and 2009.
Nor has rising fuel costs dented this growth. Demand for for aircraft has soared against a relatively steady airline fuel demand.
And while Airbus might have been selling more planes, Boeing's return on investment is looking better. According to data compiled by Bloomberg, in the past five years Boeing's commercial aircraft business has earned a profit margin of 6.5 per cent on average annually, compared with 1.9 per cent for Airbus.
Both have had their problems, though, especially with their next-generation carbon-composite jets - the Boeing 787 Dreamliner and the Airbus 350 series. But the only ones to suffer have been the airlines.
Airbus suffered a setback in April on the A350-1000 when Etihad cancelled seven jets, after already paring its order book in December. That left the Abu Dhabi state-owned airline with 12 A350s, less than half the number it originally agreed to take.
The reason: Airbus had put the aircraft through a major re-design to extend its range, a move which has delayed its entry into service by up to three years. So while Boeing celebrated the delivery of the 1,000th 777 in March, the A350-1000 had won just 62 orders, and not one them since 2008.
Other airlines have expressed their displeasure, not least Qatar Airways and Emirates Airline.
Also design and production flaws caused cracking in the A380 Superjumbo, forcing aircraft already in-service to undergo more rigorous maintenance. Airbus has announced the problem has been fixed but it has already cost its customers dear.
But Boeing is not without its own problems. It received 19 new orders for its 787 this year but other customers cancelled a total of 25 because of delays getting it into service. It is another headache for the airlines who, in order to meet all this growing demand, know they have to buy their aircraft from someone.
No airline will say as much on the record but they all dream of alternative suppliers. Out there, snapping at the heels of the two giants are a number of smaller companies: Russia's Sukhoi, with its Superjet; the Commercial Aircraft Corporation of China, Comac; Canada's Bombardier; and Brazil's Embraer.
But effectively all they are offering are their own versions of the Boeing 737 or the Airbus 320. If asked, how many airlines would opt to buy an unproven, unfamiliar airliner when it could buy more of what it already knows works? Very few would be the answer - just ask the big beasts.
dblack@thenational.ae
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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
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
MORE FROM CON COUGHLIN
The bio
Who inspires you?
I am in awe of the remarkable women in the Arab region, both big and small, pushing boundaries and becoming role models for generations. Emily Nasrallah was a writer, journalist, teacher and women’s rights activist
How do you relax?
Yoga relaxes me and helps me relieve tension, especially now when we’re practically chained to laptops and desks. I enjoy learning more about music and the history of famous music bands and genres.
What is favourite book?
The Perks of Being a Wallflower - I think I've read it more than 7 times
What is your favourite Arabic film?
Hala2 Lawen (Translation: Where Do We Go Now?) by Nadine Labaki
What is favourite English film?
Mamma Mia
Best piece of advice to someone looking for a career at Google?
If you’re interested in a career at Google, deep dive into the different career paths and pinpoint the space you want to join. When you know your space, you’re likely to identify the skills you need to develop.
The White Lotus: Season three
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Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
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The Florida Project
Director: Sean Baker
Starring: Bria Vinaite, Brooklynn Prince, Willem Dafoe
Four stars
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
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From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
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PROFILE
Name: Enhance Fitness
Year started: 2018
Based: UAE
Employees: 200
Amount raised: $3m
Investors: Global Ventures and angel investors
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Email sent to Uber team from chief executive Dara Khosrowshahi
From: Dara
To: Team@
Date: March 25, 2019 at 11:45pm PT
Subj: Accelerating in the Middle East
Five years ago, Uber launched in the Middle East. It was the start of an incredible journey, with millions of riders and drivers finding new ways to move and work in a dynamic region that’s become so important to Uber. Now Pakistan is one of our fastest-growing markets in the world, women are driving with Uber across Saudi Arabia, and we chose Cairo to launch our first Uber Bus product late last year.
Today we are taking the next step in this journey—well, it’s more like a leap, and a big one: in a few minutes, we’ll announce that we’ve agreed to acquire Careem. Importantly, we intend to operate Careem independently, under the leadership of co-founder and current CEO Mudassir Sheikha. I’ve gotten to know both co-founders, Mudassir and Magnus Olsson, and what they have built is truly extraordinary. They are first-class entrepreneurs who share our platform vision and, like us, have launched a wide range of products—from digital payments to food delivery—to serve consumers.
I expect many of you will ask how we arrived at this structure, meaning allowing Careem to maintain an independent brand and operate separately. After careful consideration, we decided that this framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each. Over time, by integrating parts of our networks, we can operate more efficiently, achieve even lower wait times, expand new products like high-capacity vehicles and payments, and quicken the already remarkable pace of innovation in the region.
This acquisition is subject to regulatory approval in various countries, which we don’t expect before Q1 2020. Until then, nothing changes. And since both companies will continue to largely operate separately after the acquisition, very little will change in either teams’ day-to-day operations post-close. Today’s news is a testament to the incredible business our team has worked so hard to build.
It’s a great day for the Middle East, for the region’s thriving tech sector, for Careem, and for Uber.
Uber on,
Dara
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.”
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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COMPANY PROFILE
Name: Kumulus Water
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Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
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Number of staff: 22
Investment raised: $4 million
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
Specs
Engine: 51.5kW electric motor
Range: 400km
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RESULTS
6.30pm Maiden (TB) Dh82.500 (Dirt) 1,400m
Winner Meshakel, Royston Ffrench (jockey), Salem bin Ghadayer (trainer)
7.05pm Handicap (TB) Dh87,500 (D) 1,400m
Winner Gervais, Connor Beasley, Ali Rashid Al Raihe.
7.40pm Handicap (TB) Dh92,500 (Turf) 2,410m
Winner Global Heat, Pat Cosgrave, Saeed bin Suroor.
8.15pm Handicap (TB) Dh105,000 (D) 1,900m
Winner Firnas, Royston Ffrench, Salem bin Ghadayer.
8.50pm UAE 2000 Guineas Trial (TB) Conditions Dh183,650 (D) 1,600m
Winner Rebel’s Romance, William Buick, Charlie Appleby
9.25pm Dubai Trophy (TB) Conditions Dh183,650 (T) 1,200m
Winner Topper Bill, Richard Mullen, Satish Seemar
10pm Handicap (TB) Dh102,500 (T) 1,400m
Winner Wasim, Mickael Barzalona, Ismail Mohammed.
Company%C2%A0profile
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RESULTS
Catchweight 82kg
Piotr Kuberski (POL) beat Ahmed Saeb (IRQ) by decision.
Women’s bantamweight
Corinne Laframboise (CAN) beat Cornelia Holm (SWE) by unanimous decision.
Welterweight
Omar Hussein (PAL) beat Vitalii Stoian (UKR) by unanimous decision.
Welterweight
Josh Togo (LEB) beat Ali Dyusenov (UZB) by unanimous decision.
Flyweight
Isaac Pimentel (BRA) beat Delfin Nawen (PHI) TKO round-3.
Catchweight 80kg
Seb Eubank (GBR) beat Emad Hanbali (SYR) KO round 1.
Lightweight
Mohammad Yahya (UAE) beat Ramadan Noaman (EGY) TKO round 2.
Lightweight
Alan Omer (GER) beat Reydon Romero (PHI) submission 1.
Welterweight
Juho Valamaa (FIN) beat Ahmed Labban (LEB) by unanimous decision.
Featherweight
Elias Boudegzdame (ALG) beat Austin Arnett (USA) by unanimous decision.
Super heavyweight
Maciej Sosnowski (POL) beat Ibrahim El Sawi (EGY) by submission round 1.
What can you do?
Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
You can report an incident to HR or an immediate supervisor
You can use the Ministry of Human Resources and Emiratisation’s dedicated hotline
In criminal cases, you can contact the police for additional support
