Dubai air traffic control diverts to Jebel Ali


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Planes arriving at Dubai International Airport will be guided by a new air traffic control system miles away in Jebel Ali soon after the new Al Maktoum International Airport opens next summer. The changes are part of plans to gradually transition activities to the new US$8.2 billion (Dh30.11bn) mega-hub. "We are taking the opportunity to create a single air traffic services centre at Al Maktoum that will serve both airports," said Paul Griffiths, (ck) the chief executive of Dubai Airports, who has lobbied for GCC governments to take a united approach to air traffic control.

The centre, called the Approach Radar Service, will be gradually transitioned to the new airport as the new equipment is installed and staff are trained. The centre is responsible for receiving flights handed over from the federal General Civil Aviation Authority (GCAA). When flights enter the Dubai airspace and are below 14,000 feet (6267 meters), the flights are passed from the GCAA to Dubai's Approach Radar Service, which then eventually hands the flights over to control tower operators at Al Maktoum, Dubai International and Sharjah airports for landing, the spokesman said. "It will be a transitional period which could run from 2010 to 2011," he said.

Al Maktoum International will open next year with a passenger terminal and one runway capable of handling 5 million passengers a year, and is envisaged as becoming the world's largest airport when it gradually expands to having five runways and capacity for 160 million travellers a year. A 92-metre air traffic control tower at Al Maktoum will be commissioned in the next few months and the airport expects be certified by the GCAA sometime during the summer. Like Dubai International, the airport is planned to be operational 24 hours a day, 7 days a week, Mr Griffiths said, and would seek to become certified to operate in low visibility conditions as soon as possible.

But at opening the new airport would not have ready a customs-controlled motorway to Jebel Ali port to allow duty-free transfer, officials said, a crucial link for logistics companies. "There won't be bonded facilities in place from day one," he said. "We are still in discussions with the RTA (Roads and Transport Authority) about road and surface transport access." Dubai Airports has promoted the bonded motorway as been a key selling point for logistics companies to move operations from Dubai International Airport to the new Al Maktoum airport, since it would reduce transit times for cargo travelling between Jebel Ali Port to the emirate's air links significantly.

Dirk Van Doorn (ck), the Middle East business and product development manager at DHL Express, said the bonded motorway is a crucial piece of infrastructure. "From an industry perspective this is absolutely key, and I'm not just speaking on behalf of DHL but my colleagues as a whole at FedEx and TNT," he said. igale@thenational.ae

Our legal consultant

Name: Dr Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

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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.”

Our legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.