Air traffic controllers keep an eye on the radar screen at Dubai International Airport. Stephen Lock / The National
Air traffic controllers keep an eye on the radar screen at Dubai International Airport. Stephen Lock / The National
Air traffic controllers keep an eye on the radar screen at Dubai International Airport. Stephen Lock / The National
Air traffic controllers keep an eye on the radar screen at Dubai International Airport. Stephen Lock / The National

Crowded Gulf skies threaten growth of region's aviation industry


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Growing congestion in the skies above the Arabian Gulf is one of the most serious problems threatening the growth of the region's aviation industry, according to the International Air Transport Association (Iata).

Aircraft are already being frequently delayed on the ground or kept flying holding patterns above the region's airports for between 40 minutes and an hour, said Iata's director and chief executive, Tony Tyler.

He was speaking as the UAE took its latest measure to ease the congestion problem, by announcing the introduction of two new air routes between the UAE and Bahrain.

"This change in the airspace structure will increase the capacity of the airspace and facilitate the flow of traffic between UAE and the Kingdom of Bahrain," the UAE General Civil Aviation Authority said yesterday.

"The modification consists of introducing three routes instead of the current unique entry route in addition to the introduction of other changes in the procedures for handling traffic flow that will contribute effectively in decreasing airspace congestion."

"Since the establishment of the airspace of the UAE there was one single route linking the UAE to the kingdom of Bahrain," Saif Al Suwaidi, the director general of the UAE General Authority for Civil Aviation said.

"This change is a natural result of the large increase in air traffic movement in the UAE and the region. The introduction of three routes accommodates for the air traffic increase."

Speaking at Iata's annual meeting in Cape Town yesterday, Mr Tyler said congestion was a problem GCC governments were aware of.

"There is a problem with air space management [in the region]," said Mr Tyler.

"It is something governments there are going to have to resolve, because more capacity is certainly needed to cope with current growth, never mind the growth being predicted.

According to Hussein Dabbas, Iata's vice president for the Middle East and North Africa, the problem is bottlenecks which delay the free flow of traffic, mainly into and through UAE and Omani airspace.

"The major problem is for traffic flowing east, towards India and Singapore," he said.

"It used to be most of the traffic flowed north to south, but now east, west traffic is growing. Success brings its own challenges, and one of them is for infrastructure to keep pace with demand."

The main stumbling blocks to easing congestion was individual governments' reluctance to surrender sovereignty over their own skies, and that more than 50 per cent of the region's airspace was controlled by the military.

"The interface with military airspace, and who controls who flies in your skies are the issues," added Mr Tyler. "But the governments in the region, particularly the UAE, understand this and are working closely together. There is no doubt there is a will to fix it."

The UAE airspace is among the smallest but most important airspaces in the world due to its strategic location between the East and the West, said Ahmed Al Jallaf, the executive director of the UAE's Air Navigation Services and chairman of the UAE National Airspace Advisory Committee.

It is controlled from the Sheikh Zayed Air Navigation Centre, the largest and most advanced air traffic management facility in the Middle East.

Opened in 2009, the centre handles more than 2,100 air traffic movements per day for the eight international airports in the UAE as well as the over-flying movements.

The centre hosts nine air traffic sectors and the approach air traffic services to Al Ain International airport.

"Improving the capacity of UAE airspace comes on top of our priorities," said Mr Al Jallaf. "Air Navigation Services Sector seeks to establish a smooth flow of traffic while ensuring the security and safety of airspace as well as the efficiency of operations."

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Another way to earn air miles

In addition to the Emirates and Etihad programmes, there is the Air Miles Middle East card, which offers members the ability to choose any airline, has no black-out dates and no restrictions on seat availability. Air Miles is linked up to HSBC credit cards and can also be earned through retail partners such as Spinneys, Sharaf DG and The Toy Store.

An Emirates Dubai-London round-trip ticket costs 180,000 miles on the Air Miles website. But customers earn these ‘miles’ at a much faster rate than airline miles. Adidas offers two air miles per Dh1 spent. Air Miles has partnerships with websites as well, so booking.com and agoda.com offer three miles per Dh1 spent.

“If you use your HSBC credit card when shopping at our partners, you are able to earn Air Miles twice which will mean you can get that flight reward faster and for less spend,” says Paul Lacey, the managing director for Europe, Middle East and India for Aimia, which owns and operates Air Miles Middle East.

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 are NFTs?

Are non-fungible tokens a currency, asset, or a licensing instrument? Arnab Das, global market strategist EMEA at Invesco, says they are mix of all of three.

You can buy, hold and use NFTs just like US dollars and Bitcoins. “They can appreciate in value and even produce cash flows.”

However, while money is fungible, NFTs are not. “One Bitcoin, dollar, euro or dirham is largely indistinguishable from the next. Nothing ties a dollar bill to a particular owner, for example. Nor does it tie you to to any goods, services or assets you bought with that currency. In contrast, NFTs confer specific ownership,” Mr Das says.

This makes NFTs closer to a piece of intellectual property such as a work of art or licence, as you can claim royalties or profit by exchanging it at a higher value later, Mr Das says. “They could provide a sustainable income stream.”

This income will depend on future demand and use, which makes NFTs difficult to value. “However, there is a credible use case for many forms of intellectual property, notably art, songs, videos,” Mr Das says.

One in nine do not have enough to eat

Created in 1961, the World Food Programme is pledged to fight hunger worldwide as well as providing emergency food assistance in a crisis.

One of the organisation’s goals is the Zero Hunger Pledge, adopted by the international community in 2015 as one of the 17 Sustainable Goals for Sustainable Development, to end world hunger by 2030.

The WFP, a branch of the United Nations, is funded by voluntary donations from governments, businesses and private donations.

Almost two thirds of its operations currently take place in conflict zones, where it is calculated that people are more than three times likely to suffer from malnutrition than in peaceful countries.

It is currently estimated that one in nine people globally do not have enough to eat.

On any one day, the WFP estimates that it has 5,000 lorries, 20 ships and 70 aircraft on the move.

Outside emergencies, the WFP provides school meals to up to 25 million children in 63 countries, while working with communities to improve nutrition. Where possible, it buys supplies from developing countries to cut down transport cost and boost local economies.

 

RESULT

Al Hilal 4 Persepolis 0
Khribin (31', 54', 89'), Al Shahrani 40'
Red card: Otayf (Al Hilal, 49')

SHAITTAN
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What went into the film

25 visual effects (VFX) studios

2,150 VFX shots in a film with 2,500 shots

1,000 VFX artists

3,000 technicians

10 Concept artists, 25 3D designers

New sound technology, named 4D SRL

 

UAE currency: the story behind the money in your pockets
Rocketman

Director: Dexter Fletcher

Starring: Taron Egerton, Richard Madden, Jamie Bell

Rating: 3 out of 5 stars 

Specs

Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request

Who's who in Yemen conflict

Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government

Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council

Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south

Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory

Wicked: For Good

Director: Jon M Chu

Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater

Rating: 4/5