The outgoing chief executive of the engineering company Roll-Royce, Warren East, says the long-haul aviation market should recover to pre-pandemic levels by 2024.
"By maybe 2024 or 2025, we should be back at pre-pandemic levels, but that, of course, means that the rest of the economy has significantly grown in the meantime," Mr East told the BBC.
After three years of strict anti-Covid policies and closed borders, China will scrap quarantine measures for international travellers from January 8.
Travel overseas for Chinese citizens will become easier, the immigration authority said this week.
For Mr East, the lifting of restrictions in China is welcome news for Rolls-Royce.
"For us in the long-haul space, we’re still only at about 70 per cent, but there is quite a regional spread on that ― Europe and the US is north of 80 per cent, this year China has been significantly held back, and that’s because of the lockdowns in China," he said.
"A lot of our Chinese business is domestic travel, so it’s wide-body jets using our engines. But it’s for domestic travel and that just hasn’t been happening ― they’ve been at about 30 per cent for much of the year.
Now, there’s very encouraging news coming out of China at the moment in terms of restrictions easing, so I think we can see a path to recovery." he added.
The company struggled during the Covid-19 pandemic and was burning through cash at the rate of more than £1 billion ($1.2 billion) a quarter. Speaking as his seven-year tenure as head of Rolls-Royce comes to an end, Mr East said that during the initial months of the pandemic “a plausible outcome was that the business would not survive.”
Its civil aerospace business, building and maintaining jet engines for the likes of Airbus and Boeing, crashed to represent only 10 per cent of revenues as airlines around the world grounded their fleets during widespread travel restrictions.
But largely thanks to a deeply discounted rights issue, which brought in billions, Rolls-Royce survived. And with the continuing easing of pandemic travel restrictions, particularly in China, things are looking good for the company in 2023.
Indeed, things are looking better for Rolls-Royce's clients, the global airlines whose Airbus and Boeing aircraft are powered by Rolls-Royce engines. After the slump of the pandemic years, the International Air Transport Association (Iata) is predicting a cautious return to profit for the world's airlines in 2023.
"Despite the economic uncertainties, there are plenty of reasons to be optimistic about 2023. Lower oil price inflation and continuing pent-up demand should help to keep costs in check as the strong growth trend continues. At the same time, with such thin margins, even an insignificant shift in any one of these variables has the potential to shift the balance into negative territory," Iata said.
Results:
Men's wheelchair 800m T34: 1. Walid Ktila (TUN) 1.44.79; 2. Mohammed Al Hammadi (UAE) 1.45.88; 3. Isaac Towers (GBR) 1.46.46.
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
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
Jeff Buckley: From Hallelujah To The Last Goodbye
By Dave Lory with Jim Irvin
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Jawan
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Zayed Sustainability Prize
