Travel and Tourism

Emirates airs A380 concerns

Emirates Airline has listed concerns with the new A380, following a series of glitches that delayed or cancelled flights.

Ivan Gale

March 15, 2009

Emirates Airline has given Airbus a list of concerns over its A380 super-jumbo jets after a series of problems that have forced the Dubai-based carrier to delay and cancel flights. Singapore Airlines and the Australian carrier Qantas have also had problems with the A380, which began commercial service in Oct 2007. The problems have involved operational reliability, rather than in-flight safety. Emirates' problems with the double-decker aircraft were raised in a 46-page presentation in a meeting at Airbus headquarters in Toulouse, France, last month. Breakdowns have grounded the four A380 aircraft in Emirates' fleet for 500 hours. Reports of the carrier's A380 problems were first reported in the German newspaper Der Spiegel. "Technical issues are expected with new aircraft, particularly one that uses many new technologies," an Emirates spokeswoman said yesterday. "Naturally, as the airline operator, we want these to be resolved as soon as possible." She added that the airline's confidence in the A380 "remains unchanged - it is an excellent aircraft. Feedback from our customers thus far has been very positive". Airbus said it was taking steps to eliminate problems as quickly as possible. The company will increase its stock of A380 spares at its parts centres, including one at Dubai Airport Free Zone, and make available response teams for technical support. "Airbus takes customers' comments very seriously," it said in a statement yesterday. Emirates began flying the aircraft in August last year and a month later grounded an aeroplane due to an electrical problem. On Dec 4, an electrical fault forced an Emirates A380 flight to New York to turn back, after passengers had already waited 14 hours while Emirates fixed a fuel-pump leak. The electrical fault caused interior lighting and the digital entertainment system to malfunction. Singapore Airlines twice grounded an A380 due to a fuel-pump problem, while Qantas identified problems with fuel pumps on two of its A380s this month. Emirates is the largest customer of the A380 aircraft from Airbus with 58 on order, worth more than US$17 billion (Dh62.44bn) at list prices. The spokeswoman said it was not considering changing its orders. "We have no plans to cancel any," she said. But the airline was in talks that could involve delaying deliveries, as airlines worldwide battle a decline in demand. Emirates operates A380 aircraft on its New York and London routes, and plans to begin ­operating the super-jumbo to Incheon International Airport in Seoul, South Korea, from November. Robert Ziegler, an analyst with AT Kearney in Dubai, said the public airing of the A380's shortcomings could pose a serious issue for Airbus. "This doesn't reflect very well on Airbus," Mr Ziegler said. "That's whose image is impacted." With airlines suffering from the economic downturn, delaying the schedule of future deliveries "would not be such a bad thing right now", he said. The A380 joins a long list of aircraft that suffered initial problems. The Boeing 787 Dreamliner is now nearly two years behind scheduled release due to production problems. The Boeing 777, the most popular long-range aircraft to date, had gearbox-bearing wear issues that reportedly caused British Airways in 1997 to temporarily withdraw it from transatlantic services. igale@thenational.ae

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
COMPANY PROFILE
Name: Kumulus Water
 
Started: 2021
 
Founders: Iheb Triki and Mohamed Ali Abid
 
Based: Tunisia 
 
Sector: Water technology 
 
Number of staff: 22 
 
Investment raised: $4 million 

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.”

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