Lufthansa subsidiary Eurowings expects to fill about 97 per cent of its initial flights to Dubai from Berlin and Stuttgart starting in October, leveraging its first-mover advantage on the new non-stop services, its chief executive said.
Advanced bookings for November and December are also looking “very strong”, Eurowings' boss Jens Bischof told The National ahead of the first service.
Eurowings will operate flights two times a week from Stuttgart Airport and four times a week from Berlin Brandenburg airport to Dubai International Airport non-stop starting on October 29 and October 30, respectively.
“The first few flights are almost sold out, we talk about almost 97 per cent load factors, so this is really very promising … I'm very satisfied that as of Day 1, we're going to see some very nice and full loads on our planes,” Mr Bischof said.
An Airbus A320 Neo aircraft is operating the new Dubai service.
“We believe that demand is going to be very strong and I'm very confident that we will reach our economic targets very early, because typically, it takes a while until a new route becomes profitable, but I'm very confident it might happen a lot faster.”
Eurowings, which marked 30 years of operations in 2023, currently flies to more than 100 destinations in 50 countries with an all-Airbus fleet of A319s and the classic and Neo versions of the A320 and A321 single-aisle jets.
It operates from five bases in Germany including Hamburg, Dusseldorf, Cologne, Stuttgart and Berlin. Its additional five bases in Europe include Mallorca, Prague, Stockholm, Salzburg and Gratz in Austria.
This month, Emirates, the world's biggest long-haul airline, reiterated its long-standing interest in serving Berlin, which would require an expanded air service agreement between the UAE and Germany.
The Dubai airline's executives met with the mayor of Berlin Franziska Giffey to discuss “Berlin’s potential for more international long-haul connectivity”.
Lufthansa-owned Eurowings said the move to commence its Berlin-Dubai service was motivated by the introduction of the A320 Neo to its fleet, which provides a longer range.
“We see that people today, both leisure and business travellers, are price-sensitive and all want to have non-stop services, especially as the aviation industry post-pandemic encountered a lot of operational challenges with baggage and connecting times … so we're very keen to utilise this possibility. It's not about a defence strategy against Emirates,” Mr Bischof said.
“Non-stop has high value these days, [being] price sensitive is top of the customers' minds these days and our rationale was not a defence strategy but rather using our new technology [and] latest aircraft with more range to serve a market which is underserved. That is now allowed by the A320 Neo.”
Eurowings parent Lufthansa serves Dubai from both its hubs in Frankfurt and Munich, as well as via Zurich on Swiss.
While the airline does not operate the full-service model, it considers its prices and departure and arrival times as the main selling points for the two non-stop routes, Mr Bischof said.
One-way tickets on Economy class from Dubai to Stuttgart start from Dh719 ($196) and Dh879 to Berlin.
More Middle East routes under consideration
The introduction of the A320 Neo to Eurowings' fleet will open more possibilities for the airline in the Middle East. It is currently considering Egypt's capital as one option.
“We're certainly looking at Cairo, as an example. It is something which is on our radar and certainly the A320 Neo would allow us a very efficient operation into Egypt,” Mr Bischof said.
“There's no fixed date yet, but it's in the planning stage.”
Eurowings serves the Red Sea coastal city of Marsa Alam and the beach resort town of Hurghada in Egypt as well as Erbil in Iraq.
The success of its Dubai service could also raise the potential for further expansion in the Gulf.
“If Dubai really comes across as [being] as promising as described, then there is certainly also an appetite to grow our presence in the Gulf region but there are no firm plans yet.”
Israel-Gaza war impact
The airline had planned to fly to Tel Aviv from its base in Dusseldorf as part of a new addition to its winter schedule, but this was put on hold due to the outbreak of the Israel-Gaza war that has raged on for three weeks.
“We’re looking very closely with a lot of disappointment these days into cities like Tel Aviv,” Mr Bischof said.
“We were planning to start the Tel Aviv service as of the beginning of the winter schedule but due to the devastating development, it's not happening right now, so we have postponed it until further notice.
“We believe that as soon as the situation hopefully calms down in that region, we will be able to start that route very fast.”
Overall, airlines have recorded plummeting travel demand to Israel, with forward bookings falling by 187 per cent between October 7 and October 19 compared to the same period last year, according to data by travel analysis company ForwardKeys.
Eurowings also temporarily suspended its service from Dusseldorf to Beirut due to the war and will resume once it is safe to do so, Mr Bischof said.
Global airlines are facing a challenging end to the year, with cost of living pressures, higher interest rates, currency swings and the Israel-Gaza war as well as the closure of airspace over Ukraine.
“The eruption of war in the Middle East on October 7 added around 3 per cent to 4 per cent to the oil price. Going forward, it is unclear how this situation will evolve,” the International Air Transport Association said.
To mitigate oil price volatility on financial performance, airlines can use more fuel-efficient aircraft.
“Nonetheless, in a highly uncertain environment, these price and volatility trends mean that fuel costs will continue to present challenges to the financial health of the industry going forward,” Iata said.
Winter travel outlook
Despite the uncertainty, Eurowings is optimistic about travel demand during the upcoming winter season.
“So far we have been successful to at least pass on the majority of these additional costs to the customer and certainly also buffered the rest through very strategic and intelligent hedging,” Mr Bischof said.
“We do not see, despite the higher ticket prices, a real effect on the demand side,” he said, noting that people are keen on air travel after two years of pandemic-induced lockdowns.
“We are still seeing very solid demand and the economics are still in good order and they work well … you will probably see that in the reporting coming up for the third quarter and certainly also for the entire year of 2023,” he said.
The Lufthansa Group is scheduled to post its third quarter financial results next month.
Looking ahead at 2024, the forward bookings are “equally positive” and “that is what makes me stay optimistic”, the Eurowings chief said.
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.”
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
GRAN%20TURISMO
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Neill%20Blomkamp%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20David%20Harbour%2C%20Orlando%20Bloom%2C%20Archie%20Madekwe%2C%20Darren%20Barnet%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203%2F5%3C%2Fp%3E%0A
Five%20calorie-packed%20Ramadan%20drinks
%3Cp%3E%3Cstrong%3ERooh%20Afza%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20contains%20414%20calories%0D%3Cbr%3E%3Cstrong%3ETang%20orange%20drink%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20serving%20contains%20300%20calories%0D%3Cbr%3E%3Cstrong%3ECarob%20beverage%20mix%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20serving%20contains%20about%20300%20calories%0D%3Cbr%3E%3Cstrong%3EQamar%20Al%20Din%20apricot%20drink%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20saving%20contains%2061%20calories%0D%3Cbr%3E%3Cstrong%3EVimto%20fruit%20squash%3C%2Fstrong%3E%0D%3Cbr%3E100ml%20serving%20contains%2030%20calories%3C%2Fp%3E%0A
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
TOP 5 DRIVERS 2019
1 Lewis Hamilton, Mercedes, 10 wins 387 points
2 Valtteri Bottas, Mercedes, 4 wins, 314 points
3 Max Verstappen, Red Bull, 3 wins, 260 points
4 Charles Leclerc, Ferrari, 2 wins, 249 points
5 Sebastian Vettel, Ferrari, 1 win, 230 points
Abu Dhabi GP weekend schedule
Friday
First practice, 1pm
Second practice, 5pm
Saturday
Final practice, 2pm
Qualifying, 5pm
Sunday
Etihad Airways Abu Dhabi Grand Prix (55 laps), 5.10pm
Wicked: For Good
Director: Jon M Chu
Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater
Rating: 4/5
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
UAE currency: the story behind the money in your pockets
The specs
Engine: 1.5-litre 4-cyl turbo
Power: 194hp at 5,600rpm
Torque: 275Nm from 2,000-4,000rpm
Transmission: 6-speed auto
Price: from Dh155,000
On sale: now
