Emirates, the biggest customer for Airbus’s A380 superjumbo, said it has presented the manufacturer with a 20-year operating programme for the aircraft, stepping up its campaign for a re-engined version of a model that’s struggling for orders elsewhere.
“We had several meetings with Airbus this year on the A380neo, on what we want and how many, right up until 2035,” Emirates president Tim Clark told reporters Monday at an aviation conference in Dubai.
While Emirates has 140 A380s on order and is interested in at least 100 more worth $43 billion, it’s struggling to convince Airbus of the merits of upgrading a plane that last won a new airline customer in 2012. The manufacturer is struggling even to deliver ordered jets, with Skymark Airlines, which wanted six, suffering financial meltdown, Transaero Airlines, buying four, on the verge of collapse, and Virgin Atlantic unsure if it needs six.
Emirates will take 21 superjumbos next year, according to Mr Clark, and has specified 15 high capacity two-class variants which “will go on routes that can take it, of which there are many,” he said. Also arriving in 2016 will be 15 Boeing 777-300ERs, of which it is also the world’s biggest operator.
Mr Clark said on Sunday that Emirates is still studying the Airbus A350 and rival 787 from Boeing and won’t make a decision on a potential order before next year, ruling out the possibility of an announcement at next month’s Dubai air show.
During the last Dubai show Emirates placed a top-up order for 50 A380s, plus 150 upgraded Boeing 777Xs. The 777-8X in particular will bring into play some markets still beyond reach, such as parts of Latin America, Mr Clark said.
Leases on existing jets could be extended until the 777X arrives, he said, with long-range 777-200LR variants getting a life-extending upgrade beyond one underway that will keep them flying for an extra three to five years.
Demand on routes to Australia, where Emirates has a venture with Qantas Airways, is buoyant, Mr Clark said, revealing that he met counterpart Alan Joyce last week to map out three-to-five-year capacity needs. That might see Qantas reactivate direct European routes using 787-9s.
Dubai International airport will become the world’s busiest within three years, overtaking Beijing and Atlanta, Dubai Airports chief executive Paul Griffiths predicted at the conference. It will reach 100 million passengers a year before the new Al Maktoum airport is ready, and may hit capacity limits.
In 2020, once Emirates has moved to Al Maktoum, the airports will swap roles, with the new site becoming a mega-hub for transfers and Dubai International catering to passengers who begin or end their journey in Dubai, he said.
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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.”
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Cry Macho
Director: Clint Eastwood
Stars: Clint Eastwood, Dwight Yoakam
Rating:**
MO
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UAE%20ILT20
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Biography
Favourite drink: Must have karak chai and Chinese tea every day
Favourite non-Chinese food: Arabic sweets and Indian puri, small round bread of wheat flour
Favourite Chinese dish: Spicy boiled fish or anything cooked by her mother because of its flavour
Best vacation: Returning home to China
Music interests: Enjoys playing the zheng, a string musical instrument
Enjoys reading: Chinese novels, romantic comedies, reading up on business trends, government policy changes
Favourite book: Chairman Mao Zedong’s poems
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
THE%20FLASH
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Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
Generation Start-up: Awok company profile
Started: 2013
Founder: Ulugbek Yuldashev
Sector: e-commerce
Size: 600 plus
Stage: still in talks with VCs
Principal Investors: self-financed by founder
Company profile
Date started: December 24, 2018
Founders: Omer Gurel, chief executive and co-founder and Edebali Sener, co-founder and chief technology officer
Based: Dubai Media City
Number of employees: 42 (34 in Dubai and a tech team of eight in Ankara, Turkey)
Sector: ConsumerTech and FinTech
Cashflow: Almost $1 million a year
Funding: Series A funding of $2.5m with Series B plans for May 2020