UAE-listed Air Arabia and the state-owned Armenian National Interests Fund (ANIF) plan to establish a new Armenian low-cost national carrier based in the capital city, Yerevan.
The new airline, a joint venture operated by both entities with a base at Zvartnots International Airport, will adopt Air Arabia's low-cost business model, Air Arabia said in a statement on Wednesday.
“We see tremendous potential for Armenia in building its airline sector, which will add sustained value to the economy through job creation and the development of [the] travel and tourism sector,” said Adel Al Ali, group chief executive of Air Arabia.
Work on securing the air operating certificate — which will allow the airline to start operating — will start shortly, according to the statement. More details about the launch date, fleet and destination network will be announced in due course, it said.
“Having a strong national low-cost airline is essential for the development of Armenia’s air transport sector, especially as a tool to recover faster from the Covid-19 crisis,” said Tatevik Revazian, chairman of the Civil Aviation Committee of Armenia.
The Armenian travel and tourism sector accounted for nearly 11.8 per cent of the country’s economic output in 2019 and 12.5 per cent of total employment, according to the statement.
“We are confident that the expertise Air Arabia brings to the JV will support the seamless launch and growth of the carrier,” Mr Revazian said.
The new Armenian airline will become Air Arabia's second joint venture airline project.
Air Arabia Abu Dhabi, a joint venture between Air Arabia and Etihad Airways, launched a year ago in July 2020 during the Covid-19 pandemic with a maiden flight to the Egyptian port city of Alexandria from its base at Abu Dhabi International Airport.
The UAE capital's first budget carrier aims to draw tourists to the Gulf city, supply passengers from secondary cities into Etihad's long-haul operations and offer affordable travel options to UAE residents. The joint venture is part of Abu Dhabi's push to diversify its economy, boost tourism and enhance its air connectivity.
Air Arabia operates five hubs, in Ras Al Khaimah, Sharjah, Abu Dhabi, Egypt and Morocco.
In May, Mr Ali said he sees a “much better” second half for air travel demand in 2021 before a return to normality by 2022.
The Covid-19 pandemic has hit the global aviation sector particularly hard, but demand is beginning to recover in fits and starts due to the increased pace of vaccine distribution in many countries across the world.
Company profile
Date started: 2015
Founder: John Tsioris and Ioanna Angelidaki
Based: Dubai
Sector: Online grocery delivery
Staff: 200
Funding: Undisclosed, but investors include the Jabbar Internet Group and Venture Friends
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.”
ENGLAND SQUAD
Team: 15 Mike Brown, 14 Anthony Watson, 13 Ben Te'o, 12 Owen Farrell, 11 Jonny May, 10 George Ford, 9 Ben Youngs, 1 Mako Vunipola, 2 Dylan Hartley, 3 Dan Cole, 4 Joe Launchbury, 5 Maro Itoje, 6 Courtney Lawes, 7 Chris Robshaw, 8 Sam Simmonds
Replacements 16 Jamie George, 17 Alec Hepburn, 18 Harry Williams, 19 George Kruis, 20 Sam Underhill, 21 Danny Care, 22 Jonathan Joseph, 23 Jack Nowell
Scoreline
Liverpool 4
Oxlade-Chamberlain 9', Firmino 59', Mane 61', Salah 68'
Manchester City 3
Sane 40', Bernardo Silva 84', Gundogan 90' 1
