The Airbus sales chief John Leahy, a dominant figure of modern aviation, has resolved one of the most widely discussed questions in the aerospace sector by settling on a retirement date - the end of 2017, company executives said on Wednesday.
His long-rumoured departure leaves a record backlog of orders for Europe’s main aerospace group but uncertainty over short-term demand, as airlines relax after bingeing on new jets.
The 67-year-old New Yorker said this year he would retire soon to make way for his deputy Kiran Rao and hinted the handover would happen in the autumn by saying he had no plans to attend the November 12-16 Dubai Airshow.
But he kept aviation markets guessing over the timing of his plans and is now aiming for one last coup as Airbus faces an aggressive new sales drive from its US rival Boeing.
The executives said Mr Leahy had agreed to stay on until the end of December. That comes as Airbus tries to end a hiatus in sales of the A380 by seeking more orders from Emirates at the Dubai Airshow.
The Airbus chief executive Tom Enders disclosed the timing of Mr Leahy’s departure during a recent internal sales meeting but has not publicly confirmed details of the transition.
Airbus declined to comment. Mr Leahy could not be reached.
Mr Leahy, seen as a relentless "deal closer", sold small Piper aircraft before joining Airbus to help break open the US market in the 1980s. He has been in the top sales post since 1994.
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Aides say he has overseen sales during that time of more than 15,500 aircraft worth US$1.7 trillion at list prices - a record which almost certainly makes him the most successful sales manager by value of goods sold in industrial history.
But after a prolonged aerospace boom, Airbus has slipped behind Boeing in the order race this year.
After suffering a rare air show defeat at the Paris Airshow in June, Mr Leahy seems determined to end his career on a high note and has set his sights on new sales for the A380, without which the plane could struggle to survive, industry sources said.
The Emirates president Tim Clark, who has forged deals worth tens of billions of dollars with Mr Leahy, declined to say whether he would agree more deals in time for the Dubai Airshow but joked about feeling the full force of Mr Leahy’s negotiating style.
“He’s anxious that we should order a squillion A380s before he goes, so that he’ll go out with a fanfare of trumpets or whatever,” he said.
“But he’s been telling me for the last four years that he’ll retire in the next year, so I’ll believe it when I see it,” added Mr Clark.
He paid tribute to Mr Leahy’s record and declined to comment on his own retirement plans.
“He’s been very good at what he is doing. He’s certainly a character who has been a big contributor to the industry.”
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On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
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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.”
