Qatar Airways said there are no issues with its fleet of Airbus A350-1000s in the wake of Hong Kong's Cathay Pacific grounding its A350 fleet for “precautionary” inspections after the in-flight failure of a Rolls-Royce engine part.
Cathay Pacific cancelled several flights after discovering an engine component failure on an A350-1000 wide-body aircraft that was forced to return from its flight to Zurich minutes after taking off from Hong Kong on Monday.
Among the top operators of the A350 in the Middle East is Qatar Airways with 24 of the wide-body aircraft in its fleet.
“At present, there has been no impact on the operation of any Qatar Airways Airbus A350-1000s. We are continuing to monitor any developments,” an airline representative told The National.
Etihad Airways, which operates five of the Airbus A350-1000s, and Turkish Airlines, which operates the smaller A350-900 variant, did not immediately provide a comment on the status of their fleet.
British engine manufacturer Rolls-Royce confirmed that Cathay Pacific's aircraft was powered by its Trent XWB-97 engines.
The company said it was committed to working closely with the airline, Airbus and the relevant Hong Kong authorities to support their investigation of the issue.
Rolls-Royce will “keep other airlines that operate Trent XWB-97 engines fully informed of any relevant developments as appropriate”, it said.
Airbus said it is “working closely” with Rolls-Royce and Cathay Pacific.
“At this time it would be inappropriate for us to comment further, pending the ongoing investigation,” the plane manufacturer said.
Cathay Pacific did not identify the engine part that failed but the airline said it was the “first of its type to suffer such failure on any A350 aircraft worldwide”.
The Airbus A350 is a twin-engined long-haul passenger jet that can carry between 300 and 480 passengers. It comes in two sizes: the A350-900 and the larger A350-1000, both powered exclusively by Rolls-Royce engines.
The A350-1000 is Airbus's twin-aisle aircraft which was designed to compete with Boeing's popular 777-300 and 777-300ER versions that go up to a 400-seat capacity. The lightweight carbon-fibre Airbus jet is an all-new design aircraft and was intended to break its US rival's dominance in the “mini-jumbo” segment.
The A350-1000 took to the skies for the first time in November 2016, followed by the first aircraft delivery in 2018 to debut customer Qatar Airways.
It is a larger variant to the new-generation A350-900, which entered service in 2015 also with Qatar Airways. That aircraft competes with Boeing's 777-200ER/LR jets and the 787-10 Dreamliner.
Customers of the A350-1000 include British Airways, Virgin Atlantic, Cathay Pacific and Qatar Airways.
The A350-1000 and the A350 freighter use Trent XWB-97 engines, Rolls-Royce's biggest civil jet engine. The A350-900 uses the Rolls-Royce Trent XWB-84 engines.
Dubai-based Emirates has also ordered the Airbus A350-900, but airline president Tim Clark has expressed dissatisfaction with the Rolls-Royce XWB engines that power the larger A350-1000 because he says they need too much maintenance in a hot and sandy environment.
Rolls-Royce has committed to investing more than £1 billion ($1.3 billion) to upgrade the engines, seeking to improve their performance and durability.
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Winner: Mamia Al Reef, Szczepan Mazur, Ibrahim Al Hadhrami.
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Winner: Jap Al Yassoob, Fernando Jara, Irfan Ellahi.
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The view from The National
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.”
