Kuwait's Jazeera Airways is evaluating bids from engine makers Pratt & Whitney and its current supplier CFM International for a jet engine order, after issuing a request for proposals in May.
The budget airline is open to offers from CFM, a General Electric and Safran joint venture, and Raytheon-owned Pratt & Whitney.
A final decision on the engines to power its new Airbus narrow-body jets would hinge on the commercial terms of the deal, Jazeera Airways' chief executive Rohit Ramachandran told The National on Sunday.
Asked if existing supplier CFM would be the natural choice for the engine order, Mr Ramachandran said: “It would be in Pratt & Whitney's interest to aggressively fight for this business because a decision genuinely has not been made.”
In January, the airline's board approved a $3.4 billion deal to buy 28 narrow-body aircraft from Airbus after signing a preliminary agreement at the Dubai Air show in November 2021. The deal included 20 A320 Neos and eight A321 Neos.
A decision on engines to power the aircraft will need to be made 24 months before delivery of the aircraft, Mr Ramachandran said.
“We have time … but we will probably make a decision well before that,” he said.
The 28 aircraft are scheduled for delivery from 2026, later than the airline's requirement.
However, it has arranged to receive two A320 Neos powered by CFM Leap engines by the end of August, he said.
“With the great support of Airbus, we have managed to engineer some slot swaps with other aircraft lessors and other airlines,” Mr Ramachandran said, declining to name them due to confidentiality clauses.
“Now the first two airplanes of that order are being delivered within the next two months.”
Jazeera Airways expects to record its second consecutive profitable year in 2022, “without a doubt”, on pent-up demand for travel after the easing of Covid-19 restrictions, Mr Ramachandran said.
The airline swung to an annual profit in 2021 as it carried more passengers and revenue increased, despite turbulent operating conditions in 2020.
Ancillary and aeronautical revenue from its dedicated Terminal 5 at Kuwait International Airport, which the airline owns and operates, will also lift earnings this year, according to Mr Ramachandran. The terminal currently accounts for 20 per cent of its profit.
The airline expects to carry at least 3.8 million passengers this year, about 25 per cent higher than pre-pandemic levels in 2019, he said.
Load factors, a measure of how well an airline is filling available seats, will reach about 80 per cent for the year.
However, higher fuel prices, which are now more than double what they were last year, are among the top pressures on the business, he said. The fuel bill constitutes about 35 per cent of the airline's total costs.
Jazeera Airways, which does not hedge fuel, has increased its fares in line with the rise in oil prices, Mr Ramachandran said.
Despite that, forward bookings for the summer season remain “very strong” for July through to late September, with load factors for the period hovering in the “low 80s [per cent]", he said.
Passenger demand is shifting from traditional routes such as London to those less-tread by Kuwaiti travellers such as Tashkent, Tbilisi and Kathmandu, Mr Ramachandran said.
The proposal to exempt Kuwaiti citizens from Schengen visa requirements when travelling to the EU for short stays of up to 90 days will “give a natural push for traffic to Schengen countries, which will form part of our network moving forward”, he said.
Jazeera Airways plans to start new routes to Eastern Europe by the end of the year.
This week, the airline will launch new routes to Vienna and Prague, and in the next 30 days, it will add three new cities in Saudi Arabia to its network, he said. Jazeera Airways already flies to six cities in the kingdom.
The airline, which already flies to Mashhad, will also add at least three more routes in Iran.
“Creating these new traffic flows with cities that were never connected with Kuwait goes to the heart of the low-cost airline model: would you rather spend money on a fancy dinner or would you rather go to Prague or Vienna for a long weekend?” Mr Ramachandran said.
Jazeera Airways will sign an initial agreement this week to join other Gulf airlines in operating shuttle flights to Qatar during this year's Fifa World Cup, he said.
It will operate six daily flights between Kuwait and Doha during the sports event.
COMPANY%20PROFILE
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The%20specs
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The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
RESULTS
1.45pm: Maiden Dh75,000 1,200m
Winner: Lady Parma, Richard Mullen (jockey), Satish Seemar (trainer).
2.15pm: Maiden Dh75,000 1,200m
Winner: Tabernas, Connor Beasley, Ahmed bin Harmash.
2.45pm: Handicap Dh95,000 1,200m
Winner: Night Castle, Connor Beasley, Satish Seemar.
3.15pm: Handicap Dh120,000 1,400m
Winner: Mystique Moon, Sam Hitchcott, Doug Watson.
3.45pm: Handicap Dh80,000 1,400m
Winner: Mutawakked, Szczepan Mazur, Musabah Al Muhairi.
4.15pm: Handicap Dh90,000 1,800m
Winner: Tafaakhor, Sandro Paiva, Ali Rashid Al Raihe.
4.45pm: Handicap Dh80,000 1,950m
Winner: Cranesbill, Fabrice Veron, Erwan Charpy.
Afcon 2019
SEMI-FINALS
Senegal v Tunisia, 8pm
Algeria v Nigeria, 11pm
Matches are live on BeIN Sports
MATCH INFO
Manchester City 3
Danilo (16'), Bernardo Silva (34'), Fernandinho (72')
Brighton & Hove Albion 1
Ulloa (20')
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.”
WITHIN%20SAND
%3Cp%3EDirector%3A%20Moe%20Alatawi%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Ra%E2%80%99ed%20Alshammari%2C%20Adwa%20Fahd%2C%20Muhand%20Alsaleh%3C%2Fp%3E%0A%3Cp%3ERating%3A%203%2F5%3C%2Fp%3E%0A
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
Paatal Lok season two
Directors: Avinash Arun, Prosit Roy
Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
Rating: 4.5/5
What are the influencer academy modules?
- Mastery of audio-visual content creation.
- Cinematography, shots and movement.
- All aspects of post-production.
- Emerging technologies and VFX with AI and CGI.
- Understanding of marketing objectives and audience engagement.
- Tourism industry knowledge.
- Professional ethics.
Match info
Liverpool 3
Hoedt (10' og), Matip (21'), Salah (45 3')
Southampton 0
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
Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
Rating: 3/5
MATCH INFO
Chelsea 3 (Abraham 11', 17', 74')
Luton Town 1 (Clark 30')
Man of the match Abraham (Chelsea)
The Little Things
Directed by: John Lee Hancock
Starring: Denzel Washington, Rami Malek, Jared Leto
Four stars
Global state-owned investor ranking by size
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China
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UAE
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Norway
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Canada
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Hydrogen: Market potential
Hydrogen has an estimated $11 trillion market potential, according to Bank of America Securities and is expected to generate $2.5tn in direct revenues and $11tn of indirect infrastructure by 2050 as its production increases six-fold.
"We believe we are reaching the point of harnessing the element that comprises 90 per cent of the universe, effectively and economically,” the bank said in a recent report.
Falling costs of renewable energy and electrolysers used in green hydrogen production is one of the main catalysts for the increasingly bullish sentiment over the element.
The cost of electrolysers used in green hydrogen production has halved over the last five years and will fall to 60 to 90 per cent by the end of the decade, acceding to Haim Israel, equity strategist at Merrill Lynch. A global focus on decarbonisation and sustainability is also a big driver in its development.
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
PREMIER LEAGUE FIXTURES
All kick-off times UAE ( 4 GMT)
Saturday
Liverpool v Manchester United - 3.30pm
Burnley v West Ham United - 6pm
Crystal Palace v Chelsea - 6pm
Manchester City v Stoke City - 6pm
Swansea City v Huddersfield Town - 6pm
Tottenham Hotspur v Bournemouth - 6pm
Watford v Arsenal - 8.30pm
Sunday
Brighton and Hove Albion v Everton - 4.30pm
Southampton v Newcastle United - 7pm
Monday
Leicester City v West Bromwich Albion - 11pm
Revival
Eminem
Interscope
