Heathrow Airport is on the path to recovery after pandemic lockdowns, post-pandemic delays and skills shortages.
The airport claims it was the world's fastest-growing last year, with passenger numbers more than trebling from 19 million to 62 million.
Revenue at Heathrow increased by 140 per cent to £2.9 billion ($3.5 billion), compared with 2021.
Heathrow remains in the red
While the airport failed to get back into the black, losses narrowed from £1.3 billion to £684 million.
Bosses said the closure of borders during the pandemic and the delays caused by staff shortages after reopening had "scarred the global aviation sector and it will take some time to fully recover".
The staff and skills shortages that occurred in the wake of the pandemic were largely caused by furlough staff finding other employment and not returning to their previous jobs at Heathrow.
This led to the airport placing a cap on passenger numbers of 100,000 a day, which lasted from July last year to November. The effect was chaotic queues and a deterioration of the relationship between Heathrow and the airlines.
However, on Thursday, Heathrow said more than 25,000 people have started work at the airport in the past 18 months and "resource levels are now close to pre-pandemic level.".
"The focus is now on improving skills, experience and building resilience," an airport representative said.
The last few years have been turbulent for the west London airport and global aviation in general.
Last year, Heathrow regained its title as western Europe's busiest airport, then three weeks ago, its chief executive announced his resignation.
John Holland-Kaye will leave this year but is staying on until his successor starts.
He said: “2022 may have been a year of recovery, but 2023 is shaping up to be a year of renewal for Heathrow.
"Our teams have already delivered a successful Christmas and half-term getaway and with a great investment plan in place, we are determined to once again rank in the top 10 airports for service.
"I couldn’t be prouder of how far Team Heathrow has come in my nine years as CEO — from transforming customer service, to securing parliamentary approval for expansion to surviving two years of border closures and rebuilding the business.
"My successor will take on a fantastic team who are making Heathrow a world-leading hub that Britain can be proud of.”
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.”
The biog
Hometown: Birchgrove, Sydney Australia
Age: 59
Favourite TV series: Outlander Netflix series
Favourite place in the UAE: Sheikh Zayed Grand Mosque / desert / Louvre Abu Dhabi
Favourite book: Father of our Nation: Collected Quotes of Sheikh Zayed bin Sultan Al Nahyan
Thing you will miss most about the UAE: My friends and family, Formula 1, having Friday's off, desert adventures, and Arabic culture and people
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