Flydubai plans to issue a tender for new narrow-body planes by the end of this year, in a deal that would be the largest aircraft order in its 15-year history, the airline's chief executive said at the Farnborough International Airshow.
"We are here because we will start the process to issue an RFP [request for proposals] for a new deal for narrow-body aircraft sometime before the end of the year," Ghaith Al Ghaith told The National on Wednesday on the sidelines of the airshow in the UK.
"So we are here to speak to everybody about it because it is a good opportunity.
"We are talking with Boeing, Airbus and engine-makers. It will be the biggest [order] for sure."
The airline made a record purchase in 2017 of 175 Boeing 737 aircraft.
The planned new order will help the airline grow its fleet into the next decade, after it takes delivery of its last Boeing 737 aircraft in 2031, and as it moves into the new passenger terminal at Al Maktoum International, whose capacity will allow it expand further, Mr Al Ghaith said.
The all-Boeing fleet operator said on Monday that its growth plans have been "stunted" after it received an update from the US plane maker that it will not get any further planes this year, leaving it with a shortage in capacity during a period of strong air travel demand.
The airline is examining the knock-on impact on its new routes and flight frequencies on existing destinations, Mr Al Ghaith said on Wednesday.
"We are studying this now and ... we may reduce frequencies on some routes, we may cancel some routes we've announced recently, we may also lease aircraft for a short period," he said.
"The team is studying this now and when I go back, we will make some decisions."
The extended jet delivery delays will have a "financial impact for sure", Mr Al Ghaith said, but the extent of that will depend on how far it can increase its aircraft utilisation.
In December last year, Boeing informed Flydubai that it will deliver 12 planes in 2024, he said. That included four planes that were originally meant to be handed over in 2023, but were delayed.
In March 2024, the airline was informed it will receive only eight of the 12 planes.
Last week, Boeing told Flydubai that it will not receive any additional aircraft beyond the four that have already been delivered this year, Mr Al Ghaith said.
Flydubai has held meetings with Boeing, among its other suppliers, during the airshow.
"Of course the issue came up, like many other issues did, but there is very little we can do about this," he said.
"As far as we're concerned, these are tough discussions."
Flydubai has ordered 251 of Boeing’s 737 jets in total and has yet to take delivery of 127 of the aircraft.
The US plane maker has been delaying deliveries as it struggles with production issues amid a safety and quality crisis that has increased regulatory scrutiny.
On Sunday, Boeing's chief of commercial jets Stephanie Pope said the company had disappointed its customers but it was making transformational and systemic changes based on feedback from its employees, airlines and regulators.
Ms Pope also said some customers had been led through Boeing's Renton factory to understand the actions being taken to address quality and safety issues, and that the factory floor had been opened for their inspection.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Huroob Ezterari
Director: Ahmed Moussa
Starring: Ahmed El Sakka, Amir Karara, Ghada Adel and Moustafa Mohammed
Three stars
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
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.”
Where to buy
Limited-edition art prints of The Sofa Series: Sultani can be acquired from Reem El Mutwalli at www.reemelmutwalli.com
Qosty Byogaani
Starring: Hani Razmzi, Maya Nasir and Hassan Hosny
Four stars
