UAE residents have been left searching for alternative routes to the UK after London's Heathrow Airport said it would be closed throughout Friday due to a “significant” power failure.
One of the busiest travel hubs in the world ground to a halt in what is being described as “a seismic disruption to global air travel” after a fire at a nearby electricity substation caused the power cut. More than 1,000 flights will be affected, according to Flight Radar.
Deborah Price, who teaches drama and English at Star International School in Mirdif in Dubai, is due to fly back to Heathrow with British Airways at 2.15am on Saturday but was initially panicking that her flight would be disrupted.
“I found out about the problems at Heathrow as I was driving into work on Friday morning,” she told The National. “I was so disappointed, I couldn't believe it. Then I thought, oh well, you know, they've got the day, they'll sort it out, and then I heard they've closed the airport until midnight.”
Ms Price is due to meet her partner in London before travelling together to North Wales and has now told The National her Saturday flight is going ahead as planned. Had she heard that the airport was to remain closed for another day, she was hoping she could be redirected to another London airport, or even Birmingham or Manchester.
The fire has also disrupted passengers travelling to the Emirates from the UK to see relatives.
Karen McMichael, 39, and her mother Hazel Johnson, 74, were due to fly out from Edinburgh to Heathrow this evening to take a BA flight to Abu Dhabi to visit family. A timely call from her brother in the UAE resulted in them booking a flight out of Edinburgh to the UAE through Doha.
“We checked and there is not really an update from BA so we just went ahead and booked a different flight,” Ms McMichael told The National. “We were quite lucky that we managed to do this quickly enough, whereas there must be so many others who are just stuck because flights will be difficult to get now. I feel awful for lots of other people who will be stuck and their plans will be disrupted.”
The Heathrow shutdown would have wreaked havoc on their plans as Ms McMichael and her mother were going to help with her brother's childcare while in the UAE. “It would be a big disruption if we had not been able to make it over,” she said. “We have got a few treats booked and will also help with childcare. So we are happy that we will still be able to do this.”
The closure has paralysed Britain's busiest airport and upended the travel plans of hundreds of thousands of passengers around the world.
“Due to a fire at an electrical substation supplying the airport, Heathrow is experiencing a significant power cut,” the airport said on X on Friday morning. “To maintain the safety of our passengers and colleagues, Heathrow will be closed until 23h59 on 21 March.”
What is the impact on international flights?
Friday's closure of London Heathrow will affect more than 1,000 flights, according to Flight Radar. “Today’s total closure of London-Heathrow will affect at least 1,351 flights to/from LHR. That doesn’t include any flights that might be cancelled or delayed due to aircraft being out of position,” Flight Radar said in a post on Bluesky.
Heathrow is also one of the busiest destinations for Gulf airlines. Emirates currently operates 42 flights per week between Dubai and the airport, according to its website.
Emirates said on Friday said it cancelled three flights to and from London Heathrow: EK001/002, EK029/030 and EK031/032. “Passengers booked or connecting on to the cancelled flights to London Heathrow will not be accepted for travel,” Emirates said. “We're monitoring the situation closely and will update our customers as the situation develops.”
Dozens of other flights bound for Heathrow have been diverted to other airports. Godly Babukutty, managing director of Epic Travels in Dubai, said the repercussions would be felt for days.
“Calling it a massive disaster, it’s a very small word for what has happened,” he said. “This will go down in history as one of the worst because an airport the size of Heathrow has stopped for a day.
"From Dubai, we have mainline carriers with multiple services that are usually full to Heathrow and each of those carry 400-plus passengers. Some airlines have five to seven flights a day. And then you add the domestic flights into Heathrow, European flights and the global routes, the knock-on effect will be felt for days.”
His advice to travellers booked to travel to Heathrow on Friday was to avoid heading to London for a few days unless it was critical. “Dubai and London have a strong relationship with a lot of people travelling back and forth for business but I would ask people who were heading to Heathrow to delay travel to London if it can be avoided because there will be a lot of disruption,” he said.
“Other airports, like Gatwick or London City Airport, have their own capacity and to reroute more flights there will be difficult. If it’s possible to reschedule that would be the best option unless there is a family emergency or a conference they must attend.”
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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.
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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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Favourite book: Asking for my favourite book has to be one of the hardest questions. However a current favourite would be Sidewalk by Mitchell Duneier
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