An undelivered Airbus A350 built for Qatar Airways is seen in storage at Chateauroux, France in September as Airbus and the Gulf carrier remain locked in a contractual and safety dispute. Reuters
An undelivered Airbus A350 built for Qatar Airways is seen in storage at Chateauroux, France in September as Airbus and the Gulf carrier remain locked in a contractual and safety dispute. Reuters
An undelivered Airbus A350 built for Qatar Airways is seen in storage at Chateauroux, France in September as Airbus and the Gulf carrier remain locked in a contractual and safety dispute. Reuters
An undelivered Airbus A350 built for Qatar Airways is seen in storage at Chateauroux, France in September as Airbus and the Gulf carrier remain locked in a contractual and safety dispute. Reuters

Qatar Airways and Airbus A350 saga continues in London court


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Airbus and Qatar Airways return to court on Friday as a contractual and safety dispute over A350 passenger jets descends into a tug-of-war over confidential documents, while the sums at stake in their unprecedented dispute top $1.5 billion.

Qatar Airways is suing Airbus over damage to the painted surface and anti-lightning system on A350 jets, saying safety could be at risk from a design defect. Airbus acknowledges quality flaws but denies the design is at fault and insists the jets are safe.

The two sides must provide each other with thousands of pages of documents as their row — which has already altered the shape of competition in the jet market — heads towards a rare London aerospace trial in mid-2023, barring a settlement.

The case has shed a rare public spotlight on the inner workings of the global jet market, including contractual details and the industrial playbook for preparing delivery of new jets.

Friday's High Court hearing is expected to hear mutual claims of foot-dragging over the release of documents including maintenance files and engineering analysis, as well as the return of millions of dollars of deposits and Airbus credits.

The number of A350s grounded by Qatar because of surface damage has risen to 28 out of 53 in its fleet.

Airbus said last month it had revoked all 19 remaining A350 orders from Qatar Airways, severing outstanding business with the Gulf carrier for new jets.

Boeing is meanwhile being dragged into the public dispute between its arch rival and one of its own biggest clients for the first time, sources say.

The dispute over the A350 widened earlier this year when Airbus revoked a separate contract for 50 smaller A321neo jets, arguing the contracts were linked by a cross-default clause.

Surface damage on a Qatar Airways' Airbus A350, parked at its aircraft maintenance hangar in Doha. Reuters
Surface damage on a Qatar Airways' Airbus A350, parked at its aircraft maintenance hangar in Doha. Reuters

Qatar subsequently ordered the Boeing 737 MAX and this catapulted arguments over the relative merits of the jets into court, with Airbus saying the MAX was as good as the A321 in a bid to avoid being forced to build the jets for Qatar.

Now the airline has been ordered to hand over a preliminary version of the MAX contract to Airbus with restrictions, but Boeing objects to elements of the rare disclosure, sources said.

Boeing has declined to comment.

The case's UK judge has called for a clear-the-air meeting between Airbus, the airline and Qatari and European regulators, but there are no signs so far of this happening.

Under aviation rules companies usually talk to their own regulators who then discuss safety with each other, but the case has highlighted a breakdown in the usual system of goodwill.

Airbus and Qatar Airways both declined to comment before Friday's hearing.

Company profile

Name: Dukkantek 

Started: January 2021 

Founders: Sanad Yaghi, Ali Al Sayegh and Shadi Joulani 

Based: UAE 

Number of employees: 140 

Sector: B2B Vertical SaaS(software as a service) 

Investment: $5.2 million 

Funding stage: Seed round 

Investors: Global Founders Capital, Colle Capital Partners, Wamda Capital, Plug and Play, Comma Capital, Nowais Capital, Annex Investments and AMK Investment Office  

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.”

FA Cup quarter-final draw

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Sheffield United v Arsenal

Newcastle v Manchester City

Norwich v Derby/Manchester United

Leicester City v Chelsea

THE BIO

Bio Box

Role Model: Sheikh Zayed, God bless his soul

Favorite book: Zayed Biography of the leader

Favorite quote: To be or not to be, that is the question, from William Shakespeare's Hamlet

Favorite food: seafood

Favorite place to travel: Lebanon

Favorite movie: Braveheart

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Vidaamuyarchi

Director: Magizh Thirumeni

Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra

Rating: 4/5

 

What is the FNC?

The Federal National Council is one of five federal authorities established by the UAE constitution. It held its first session on December 2, 1972, a year to the day after Federation.
It has 40 members, eight of whom are women. The members represent the UAE population through each of the emirates. Abu Dhabi and Dubai have eight members each, Sharjah and Ras al Khaimah six, and Ajman, Fujairah and Umm Al Quwain have four.
They bring Emirati issues to the council for debate and put those concerns to ministers summoned for questioning. 
The FNC’s main functions include passing, amending or rejecting federal draft laws, discussing international treaties and agreements, and offering recommendations on general subjects raised during sessions.
Federal draft laws must first pass through the FNC for recommendations when members can amend the laws to suit the needs of citizens. The draft laws are then forwarded to the Cabinet for consideration and approval. 
Since 2006, half of the members have been elected by UAE citizens to serve four-year terms and the other half are appointed by the Ruler’s Courts of the seven emirates.
In the 2015 elections, 78 of the 252 candidates were women. Women also represented 48 per cent of all voters and 67 per cent of the voters were under the age of 40.
 

Who was Alfred Nobel?

The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.

  • In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
  • Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
  • Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
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T10 Cricket League
Sharjah Cricket Stadium
December 14- 17
6pm, Opening ceremony, followed by:
Bengal Tigers v Kerala Kings 
Maratha Arabians v Pakhtoons
Tickets available online at q-tickets.com/t10

Updated: October 14, 2022, 11:42 AM