Air ticket prices have gone up this year compared with the same time last year for the summer months as airlines pass on high fuel costs to customers, a travel executive said. Silvia Razgova / The National
Air ticket prices have gone up this year compared with the same time last year for the summer months as airlines pass on high fuel costs to customers, a travel executive said. Silvia Razgova / The NatShow more
Cost of summer getaways hit as air ticket prices rise
Take our poll: The cost of jetting off on holiday for the summer is soaring as carriers raise air ticket prices for popular destinations on the back of high fuel prices.
The cost of jetting off on holiday for the summer is soaring as carriers raise ticket prices for popular destinations on the back of high fuel prices.
"The airlines get pretty full and this is the time that airlines have their say when it comes to pricing," said Sunil D'Souza, the regional travel director at Kanoo Travel in Dubai. "Airfares have gone up 12 to 15 per cent this year compared to the same time last year for the summer months."
The increase is partly because airlines are passing high fuel costs along to customers during the peak travel season, he said. Additional charges and taxes in many destinations are also to blame, in part, forhigher prices, he added.
Tarique Khatri, the senior vice president of business development at Cleartrip in the UAE, estimated that prices were up by 10 to 15 per cent compared with last summer.
For instance, Etihad Airways is charging fares starting from Dh8,460 (US$2,303) on some dates for an economy return flight to New York at the end of June and Dh5,430 for Dublin.
The cost of a return economy-class flight from Dubai to London at the end of next month on Emirates Airline starts at Dh4,900 and rises to Dh5,890. Flights with Virgin Atlantic for the same trip startat Dh4,740.
"It's got to do a little bit with what's going on [in] the UK," said Mr Khatri. "You've got the [Diamond] Jubilee happening; you've got the Olympics happening. There is a lot of demand for London at this time."
Emirates said in a statement: "Summer is a traditionally busy period for travel from the UAE with large numbers of residents flying out of the country on vacation.
"Like every commercially orientated business, Emirates regularly reviews its fares to reflect market dynamics including fuel price, seasonality and demand."
For its part, Virgin says its fares, on average, are lower than last year.
"Virgin Atlantic fares on our Dubai-London route have decreased year-on-year," said Gretchen Watson, the marketing public relations manager for Virgin Atlantic Airways in the UAE. "Since the turn of the year, market conditions have become tougher with increased capacity, faltering consumer confidence and high fuel prices."
High fares for certain destinations are not hampering demand, however, according to travel agents.
"People are still flying," said Mr D'Souza. "People traditionally plan these breaks, and regardless of the price, they fly. The demand this year is very, very high."
The timing of Ramadan, which begins in July this year, is also affecting trends.
Swiss International Air Lines (Swiss) says that its fares are stable and in some cases lower compared with last year's, as it expects demand to be subdued during Ramadan.
"Our booking outlook for the next three months is slightly lower than last year's figures," said Martin Massüger, Swiss's head of sales for the Middle East, Africa, Pakistan and Iran.
"This is because the holy month of Ramadan starts early this year, thus affecting the longer travel period outside the UAE," he added. "However, we expect a second wave or an uptick during the Eid holidays in August."
Lufthansa said it was also offering promotional fares for the summer.
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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.”
Scoreline
Switzerland 5
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Director: Tom Tykwer
Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger
Rating: 3/5
Other workplace saving schemes
The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
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
The Baha'i faith was made known in Yemen in the 19th century, first introduced by an Iranian man named Ali Muhammad Al Shirazi, considered the Herald of the Baha'i faith in 1844.
The Baha'i faith has had a growing number of followers in recent years despite persecution in Yemen and Iran.
Today, some 2,000 Baha'is reside in Yemen, according to Insaf.
"The 24 defendants represented by the House of Justice, which has intelligence outfits from the uS and the UK working to carry out an espionage scheme in Yemen under the guise of religion.. aimed to impant and found the Bahai sect on Yemeni soil by bringing foreign Bahais from abroad and homing them in Yemen," the charge sheet said.
Baha'Ullah, the founder of the Bahai faith, was exiled by the Ottoman Empire in 1868 from Iran to what is now Israel. Now, the Bahai faith's highest governing body, known as the Universal House of Justice, is based in the Israeli city of Haifa, which the Bahais turn towards during prayer.
The Houthis cite this as collective "evidence" of Bahai "links" to Israel - which the Houthis consider their enemy.
