Employees work on the wing of a Boeing 787 Dreamliner during final assembly of the airplane at the company’s plant in Everett, Washington. Patrick Fallon / Bloomberg News
Employees work on the wing of a Boeing 787 Dreamliner during final assembly of the airplane at the company’s plant in Everett, Washington. Patrick Fallon / Bloomberg News
Employees work on the wing of a Boeing 787 Dreamliner during final assembly of the airplane at the company’s plant in Everett, Washington. Patrick Fallon / Bloomberg News
Employees work on the wing of a Boeing 787 Dreamliner during final assembly of the airplane at the company’s plant in Everett, Washington. Patrick Fallon / Bloomberg News

Etihad Airways happy to keep Boeing 787 dream on flight path


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Small aircraft-shaped icons edge slowly across a large map of the world, watched intently by half a dozen people hunched over banks of smaller screens packed with streaming data.

Located in a small room, deep in Boeing’s commercial offices in the leafy suburbs of Everett in Washington, on the US west coast, this is the nerve-centre monitoring the plane maker’s most high-tech aircraft to date: the 787 Dreamliner.

Supplying up-to-the-second information on the health of 787s around the world, the Operations Control Center – as it is known – has been the scene of frantic action in the past few months. Several aircraft have been hit by technical glitches that have infuriated airline bosses and inconvenienced passengers. They followed aviation regulators ordering a three-month grounding of the long-haul jetliner this year because of battery meltdowns.

Sporting a tie with 787 wingtips on it, Mike Fleming, the vice president of 787 services and support, is the man in charge of the aircraft maker’s response to any glitches. Messages to his BlackBerry phone from 787 onboard computers alert him to any problems when he is outside the control room.

“As soon as any information is generated on the airplane’s maintenance system it streams down to the ground and we get it instantaneously,” he says.

Recent issues include a Dreamliner headed to Tokyo being diverted back to San Diego on Wednesday because of a possible problem with the aircraft’s deicing system.

Airline officials told local media the pilot received an error message for the system and made the decision to go back to San Diego so repairs could be made.

Other problems emerged late last month when the budget airline Norwegian Air Shuttle grounded one of its long-haul 787s and demanded Boeing repair the plane after it suffered repeated breakdowns. The same day, a 787 operated by Poland’s Lot airline was forced to land unexpectedly in Iceland because of a problem with the jet’s identification system.

Boeing sent personnel and parts to both aircraft to fix the issues.

The incidents provided a reality check for Boeing after euphoria in the wake of the first successful test flight recently of the 787-9, the plane’s latest incarnation.

They will also be closely noted by the Middle East carriers Etihad Airways and Qatar Airways, two of the 787's biggest customers, which Boeing is counting on to fork out for dozens of new orders.

Like the 787’s 55 other buyers, they were attracted by the razzmatazz surrounding one of the world’s most talked about aircraft. Offering 20 per cent less fuel burn than similar sized aircraft and a range in the same league as bigger jets, the 787 was seen as a saviour for cash-squeezed airlines.

Etihad is the biggest customer of the 787-9, which offers a longer range and a greater passenger capacity than the 8 version. Etihad’s 41 orders are due to start arriving from late next year, while airberlin, which Etihad owns a 29.2 per cent stake in, is taking 15 787s.

James Hogan, Etihad's president and chief executive, has frequently given his backing to the 787, while opting to stand closer to the back of the order queue to avoid the risk of disruptions from any glitches.

“Etihad Airways is proud to have the largest airline fleet order in the world for the Boeing 787-9 Dreamliner, with 41 aircraft scheduled for delivery between 2014 and 2019,” Mr Hogan says.

“The commitment made by this order demonstrates the confidence we have in the aircraft and the impact it will have on our fleet capabilities.”

Akbar Al Baker, the chief executive of Qatar Airways, is another fan. Although his patience has at times worn thin. It has seven 787-8s already and a further 23 on order.

But the airline suffered in January when aviation authorities grounded the entire world fleet of 787s after batteries overheated on two jets within two weeks. The flight ban was removed in April when Boeing changed the battery system, which provides back-up power to the plane. Qatar reportedly briefly pulled a 787 out of service again in July because of a “minor issue”.

Mr Al Baker said in May the airline lost US$200 million in profits because of the three-month grounding but received compensation from Boeing for the delay.

In comments carried recently by Flightglobal, an online aviation news source, Mr Al Baker warned Boeing further hiccups affecting the 787 would weigh on the airline’s decision over taking up 30 additional purchase rights for the 787-9. Qatar’s alternative option is the A350, Airbus’ rival fuel-efficient jetliner. It already has 80 A350s on order – 42 of the 900 models and 38 1000 models.

The 787 is not the first aircraft to suffer from early glitches and is unlikely to be the last. The Airbus A380 superjumbo developed wing cracks that required redesign by the plane maker.

In addition, analysts say the successful test flights of the 9 version suggest Boeing may have ironed some of the kinks with the 8 model.

With a range of up to 8,500 nautical miles – 300 more than its predecessor – and able to carry up to 290 passengers, the 9 further pushes the envelope for mid-sized planes.

Etihad Airways had “essentially based its long-term future” alongside the 787-9, says Saj Ahmad, the chief analyst at StrategicAero Research.com, an aviation consultancy.

“Being able to carry more passengers over greater ranges while using less fuel and with more environmentally-friendly credentials, the 787-9 will allow the likes of Etihad and other customers inherent flexibility in how they deploy the airplane,” he says.

“We’ve seen how Ethiopian Airlines has directly attributed its profitability down to the 787, so it’s inevitable that the 787-9 will do the same for its customers too.”

Boeing has already got its eye on the 787’s next model, too. Launched at the Paris Airshow in June, the US maker received 102 provisional orders for the 787-10 worth nearly US$30 billion at list prices. It brings total sales for the 787 to about 1,450.

tarnold@thenational.ae

Red flags
  • Promises of high, fixed or 'guaranteed' returns.
  • Unregulated structured products or complex investments often used to bypass traditional safeguards.
  • Lack of clear information, vague language, no access to audited financials.
  • Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
  • Hard-selling tactics - creating urgency, offering 'exclusive' deals.

Courtesy: Carol Glynn, founder of Conscious Finance Coaching

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

Jetour T1 specs

Engine: 2-litre turbocharged

Power: 254hp

Torque: 390Nm

Price: From Dh126,000

Available: Now

The White Lotus: Season three

Creator: Mike White

Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell

Rating: 4.5/5

6 UNDERGROUND

Director: Michael Bay

Stars: Ryan Reynolds, Adria Arjona, Dave Franco

2.5 / 5 stars

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MATCH INFO

Uefa Champions League, semi-final result:

Liverpool 4-0 Barcelona

Liverpool win 4-3 on aggregate

Champions Legaue final: June 1, Madrid

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PROFILE OF INVYGO

Started: 2018

Founders: Eslam Hussein and Pulkit Ganjoo

Based: Dubai

Sector: Transport

Size: 9 employees

Investment: $1,275,000

Investors: Class 5 Global, Equitrust, Gulf Islamic Investments, Kairos K50 and William Zeqiri

Where to donate in the UAE

The Emirates Charity Portal

You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.

The General Authority of Islamic Affairs & Endowments

The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.

Al Noor Special Needs Centre

You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.

Beit Al Khair Society

Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.

Dar Al Ber Society

Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.

Dubai Cares

Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.

Emirates Airline Foundation

Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.

Emirates Red Crescent

On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.

Gulf for Good

Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.

Noor Dubai Foundation

Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).

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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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.

Prophets of Rage

(Fantasy Records)