MUMBAI // Airbus has won the biggest single-company order in aviation history.
The deal, worth US$15.6 billion (Dh57.3bn), is for the delivery of 180 single-aisle aircraft to IndiGo, India's largest budget airline.
Airbus will begin deliveries of the aircraft in 2015 after it completes a previous order for 100 aeroplanes placed by the same airline in 2005.
According to Airbus, the previous biggest order was for 150 planes from China Aviation Supplies Import & Export Group Corporation in 2006. The UK's EasyJet placed an order for 120 planes in 2002 and US Airways ordered 124 planes in 1997.
Aditya Ghosh, the president of IndiGo, said the airline planned to use the additional capacity to expand domestic routes to take advantage of the "soaring demand" for air travel from India's middle class. The airline currently operates 34 aircraft.
IndiGo also plans to launch international routes to the Middle East and South East Asia this year, five years after it entered the aviation business,which makes it eligible according to government regulations to fly overseas.
The record order includes 30 classic A320s, Airbus's standard aircraft for 150 passengers, which is its best-selling model, and 150 upgraded fuel-efficient versions of the same aircraft called the A320neo.
"This order for industry-leading, fuel-efficient aircraft will allow IndiGo to continue to offer low fares," said Rakesh Gangwal and Rahul Bhatia, the co-founders of IndiGo. "Ordering more A320s was the natural choice to meet India's growing flying needs."
The huge order, announced at Airbus's headquarters in Toulouse, France, is seen by industry experts as a sign of India's booming aviation industry, currently expanding at breakneck speed to accommodate soaring passenger demand.
According to government forecasts, domestic passenger numbers are expected to jump fourfold to 180 million by 2020. Boeing estimates the sector will require 1,150 commercial jets worth $135bn by 2030.
"India's airline industry is in expansion mode," said Harsh Vardhan, the chairman of Starair Consulting, an aviation consultancy in New Delhi. "The demand-supply gap needs to be filled, and the only way to do it is by acquiring new aircraft."
IndiGo is owned jointly by InterGlobe Enterprises and Mr Gangwal, who is a former president and chief executive of US Airways. The airline is one of the biggest domestic carriers in India.
In November, it trumped the national carrier, Air India, to become the third largest-airline, with a market share of more than 18 per cent.
Mr Ghosh said the airline was considering sale-and-leaseback deals and debt issuances to finance the record order. An initial public offering later this year is also being considered. IndiGo, he said, was keeping "all its options open".
Last year, the airline submitted a proposal to India's aviation ministry, seeking permission to start operating on 15 international routes this year, including service to Dubai, Abu Dhabi and Sharjah.
The Middle East market figures prominently in IndiGo's expansion plans, he said, especially given that 6 million Indian nationals make up the largest expatriate community in GCC countries. Of these, and estimated 1.2 million are in the UAE.
IndiGo expects to operate most of its flights to the region from southern Indian cities such as Kozhikode, Kochi and Thiruvananthapuram.
Mr Ghosh declined to disclose whether the airline was considering code-sharing tie-ups or alliances with other carriers based in the Middle East.
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Sinopharm vaccine explained
The Sinopharm vaccine was created using techniques that have been around for decades.
“This is an inactivated vaccine. Simply what it means is that the virus is taken, cultured and inactivated," said Dr Nawal Al Kaabi, chair of the UAE's National Covid-19 Clinical Management Committee.
"What is left is a skeleton of the virus so it looks like a virus, but it is not live."
This is then injected into the body.
"The body will recognise it and form antibodies but because it is inactive, we will need more than one dose. The body will not develop immunity with one dose," she said.
"You have to be exposed more than one time to what we call the antigen."
The vaccine should offer protection for at least months, but no one knows how long beyond that.
Dr Al Kaabi said early vaccine volunteers in China were given shots last spring and still have antibodies today.
“Since it is inactivated, it will not last forever," she said.
In Full Flight: A Story of Africa and Atonement
John Heminway, Knopff
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.”
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
