The boss of Dubai Airports is gearing up for a "enormous" increase in passenger numbers after the UK confirmed it would relax restrictions on travel from the UAE – but he admitted figures may not hit pre-pandemic level for another four years.
Paul Griffiths said the move to allow travellers from the Emirates to visit the UK without needing to quarantine – as long they are fully immunised with one of four approved vaccines – would be a huge boost to the aviation industry as the public embrace the "freedom to travel".
But he remained cautious about the road to a full recovery, admitting the airport may not return to its pre-pandemic levels until 2025.
Turbulent journey during pandemic
Mr Griffiths said the airport had been on a "turbulent journey" since the coronavirus outbreak, as the initial widespread grounding of flights and subsequent safety restrictions took their toll.
He said he hoped the recent easing of restrictions across the world would help the airport achieve between 35 to 40 per cent of its pre-Covid passenger numbers, which hit 86.4 million in 2019, by the end of this year.
He said the airport was operating at about 31 per cent of that capacity but believes that figure will rise significantly in the next 12 months.
"It's been a long, hard journey, quite a turbulent one, with ups and downs month on month, week on week," he told Dubai Eye radio's Business Breakfast.
"I think the real test will be the school half-term from northern Europe, where we are already starting to see some very, very busy days emerge for October.
"So we've got a little bit of a way to go. Now, we're expecting by the end of the year something like 26 million passengers, according to our latest forecast.
"Next year we're probably going to be about 56 or 57 million. This announcement might push that further north and hopefully by 2025 at the absolute latest I expect to be announcing numbers closer to those that we saw in 2019.
"I think it's probably quite a good idea for us to be a little bit conservative with our numbers and not plan to grow our production capacity too quickly because, of course, cash has been a massive challenge over the last 18 months. But I really do hope that I am being completely conservative and we will smash those numbers."
Demand for travel set to soar
In June, Emirates said it aimed to fly to 90 per cent of its pre-pandemic network by the end of the following month, operating 880 weekly services across 124 cities.
Mr Griffiths expects the "pent-up demand" from passengers freed from quarantine requirements to generate a surge in numbers flying through the airport in the coming weeks.
He described the UAE to UK travel changes as, "an absolutely enormous deal".
"I imagine if you have been a prisoner for some time and you're let out on parole, this must be exactly what it feels like, because it's just terrific now we're seeing all of the restrictions around the world just tumbled down. And I hope very soon we'll be back to DXB as we know and love it, you know the 2019 figures, hopefully, we'll be back with this very shortly," Mr Griffiths said.
He referred to Emirates' decision to increase its number of weekly flights from Dubai to UK to 77 by the end of October as testament to the progress being made.
"The thing we have missed most is that freedom to travel and now that's finally put to an end by the very excellent announcements we have.
"I'm sure that pent-up demand will be enormous, phones will be ringing off the hook, the internet will break. There will be a huge demand for air travel now that mobility is back on the agenda."
Vaccination the way forward
Mr Griffiths said moves by the UK and the US to open up to fully vaccinated travellers showed the importance of inoculation drives in aiding recovery from the pandemic.
The UAE has made a nationwide vaccination campaign central to its efforts to return to normality.
More than 19.6 million doses of Covid-19 vaccine have been administered to the public in the Emirates since December, with more than 81 per cent people now having received two doses.
"I do believe that's always been the way forward," Mr Griffiths said. "I've been arguing that for many, many months – get your vaccine. The vaccine passport is coming. It is the only way to recover the travel industry and I think now everyone is recognising that."
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
Company%C2%A0profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3EHayvn%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2018%3Cbr%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3EChristopher%20Flinos%2C%20Ahmed%20Ismail%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EAbu%20Dhabi%2C%20UAE%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3Efinancial%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%20%3C%2Fstrong%3Eundisclosed%3Cbr%3E%3Cstrong%3ESize%3A%3C%2Fstrong%3E%2044%20employees%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3Eseries%20B%20in%20the%20second%20half%20of%202023%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EHilbert%20Capital%2C%20Red%20Acre%20Ventures%3C%2Fp%3E%0A
The UAE squad for the Asian Indoor and Martial Arts Games
The jiu-jitsu men’s team: Faisal Al Ketbi, Zayed Al Kaabi, Yahia Al Hammadi, Taleb Al Kirbi, Obaid Al Nuaimi, Omar Al Fadhli, Zayed Al Mansoori, Saeed Al Mazroui, Ibrahim Al Hosani, Mohammed Al Qubaisi, Salem Al Suwaidi, Khalfan Belhol, Saood Al Hammadi.
Women’s team: Mouza Al Shamsi, Wadeema Al Yafei, Reem Al Hashmi, Mahra Al Hanaei, Bashayer Al Matrooshi, Hessa Thani, Salwa Al Ali.
UAE currency: the story behind the money in your pockets
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.”
