The implementation of a new air traffic management system at Dubai International Airport marks a critical step towards air-traffic efficiency in the Arabian Gulf region. Pawan Singh / The National
The implementation of a new air traffic management system at Dubai International Airport marks a critical step towards air-traffic efficiency in the Arabian Gulf region. Pawan Singh / The National

Air traffic is key for the future



The implementation of a new air traffic management system at Dubai International Airport marks a critical step towards air-traffic efficiency in the Arabian Gulf region. Thanks to the rapid growth of Gulf airlines such as Emirates and Etihad, this region is one of the busiest air-traffic corridors in the world. As regional airlines continue to expand to new destinations and increase traffic on existing routes, the health of the industry will partly hinge on the application of advanced air traffic control systems.

As The National reported yesterday, the approach peak offload procedure, which has been on trial since March, assists the flow of traffic at Dubai International Airport by scheduling a lighter aircraft, such as the Airbus A320 or Boeing 737, to one of the two runways, during peak arrival hours behind a larger aircraft, such as the Airbus A380. This permits the lighter aircraft to maintain a shorter distance than had previously been possible behind larger aircraft while landing, allowing for faster runway clearance and taxi to the terminal. This, in turn, allows flights in the queue to land quicker, cutting peak arrival delays by up to 40 per cent.

While this might sound technical, the premise is easy to understand. Improving efficiency of aircraft landing will enable a safe increase in traffic and thus further expansion by airlines such as Emirates. Dubai’s movement on the issue is welcome, but more is needed across the Arabian Gulf corridor to ensure that heavy traffic patterns in this area remain safe and efficient.

Not only should other airports follow Dubai’s model but debate about a unified GCC regional air traffic management system is needed.

This could result in a united approach that will allow all carriers in the Gulf the ability to safely expand capacity. Such a development is part of the infrastructure (similar to runways and terminals) needed to maintain world class airlines.

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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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Sector: Sustainability
Total funding: Self funded
Number of employees: 4

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