Flydubai is in talks with Boeing and Airbus for a new aircraft order to fulfil its fleet requirements for growth and replacement in the next phase of its expansion, the airline's chief executive has said.
The all-Boeing fleet operator is considering both the Boeing 737 Max and Airbus A320 Neo models, head of flydubai Ghaith Al Ghaith told a media roundtable during the Arabian Travel Market in Dubai on Monday. He did not provide the size of the order.
The airline may sign an agreement by the end of the year, Mr Al Ghaith said.
The airline's home base will host the biennial Dubai Airshow in November, when plane makers will vie to announce the highest number of commercial jet deals.
“We are working very closely to try and sign some deals, hopefully by the Dubai Airshow,” Mr Al Ghaith said. He added that the timeline to conclude any pacts was not firm.
“At the end of the day, the aircraft manufacturing market is so competitive, it's a seller's market right now … I would love to do something by the end of the year, hopefully before the air show.”
The airline is exploring opportunities with both plane makers.
“We have a good pipeline of aircraft coming, but in our business, we don't just stop there, we have to buy aircraft at the right time to get the best price possible,” Mr Al Ghaith said.
The airline is considering a fleet plan for when its existing aircraft order is fully delivered.
“We're coming very close to deciding that we need to make a move for more aircraft because there are opportunities but also there is a threat,” he said, referring to high jet prices and extensive backlogs with the manufacturers.
The airline's annual profit surged 43 per cent last year on the back of cost-control measures and World Cup shuttle flights, marking 2022 its second consecutive year of profitability since the Covid-19 pandemic started.
The sister airline of Emirates registered a record full-year profit of Dh1.2 billion ($327 million) in 2022 as the number of passengers it carried rose 89 per cent.
In the first quarter of 2023, the number of passengers that flydubai carried jumped 50 per cent from the same period last year amid strong travel demand, Mr Al Ghaith said.
We expect this surge to continue in the summer of this year and we will be operating a record of five million seats in the summer ... Dubai is in demand more than ever
Ghaith Al Ghaith,
flydubai chief executive
“We expect this surge to continue in the summer of this year and we will be operating a record of five million seats in the summer,” he said.
“Dubai is in demand more than ever. I've been in this business for 37 years and I've never seen business as good as last year and what's happening this year, it's incredible.”
Mr Al Ghaith said there had been no impact on travel demand from high oil prices and added he expected demand and yields to remain strong for the rest of the year.
Airfares, which have now reached their peak due to supply and demand, are likely to remain high over the summer, he said.
The airline has launched 12 new routes this year so far, with plans to add nine summer routes, Mr Al Ghaith said. The airline is finalising its winter schedule and may add another one or two routes.
Flydubai showcased its new business seats at the Arabian Travel Market, which it will start introducing from November on its longest routes. Up to six jets will be fitted with the new seats by the first quarter of 2024, Mr Al Ghaith said.
Flydubai expects to take delivery of 17 aircraft in 2023, of which it has already received seven, and will end the year with a total fleet of about 90 jets.
Supply chain problems that delayed aircraft deliveries were at their worst last year, but will continue to be challenging in 2023 before returning to normal in 2024, Mr Al Ghaith said.
Asked about whether Boeing's latest production issue with its 737 Max model has affected flydubai's deliveries, Mr Al Ghaith said: “I know that at least that one aircraft for us is affected this year, maybe later on because Boeing is still checking [their inventory].
“It's an issue but you just have to make sure that you deal with it in a way where safety and security of passengers is the most important thing for airlines and we will manage with the airline manufacturers when it comes to deliveries.”
WHAT%20IS%20'JUICE%20JACKING'%3F
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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.”
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
The Voice of Hind Rajab
Starring: Saja Kilani, Clara Khoury, Motaz Malhees
Director: Kaouther Ben Hania
Rating: 4/5
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
COMPANY%20PROFILE
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What is a robo-adviser?
Robo-advisers use an online sign-up process to gauge an investor’s risk tolerance by feeding information such as their age, income, saving goals and investment history into an algorithm, which then assigns them an investment portfolio, ranging from more conservative to higher risk ones.
These portfolios are made up of exchange traded funds (ETFs) with exposure to indices such as US and global equities, fixed-income products like bonds, though exposure to real estate, commodity ETFs or gold is also possible.
Investing in ETFs allows robo-advisers to offer fees far lower than traditional investments, such as actively managed mutual funds bought through a bank or broker. Investors can buy ETFs directly via a brokerage, but with robo-advisers they benefit from investment portfolios matched to their risk tolerance as well as being user friendly.
Many robo-advisers charge what are called wrap fees, meaning there are no additional fees such as subscription or withdrawal fees, success fees or fees for rebalancing.
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Juventus 1 (Dybala 45')
Lazio 3 (Alberto 16', Lulic 73', Cataldi 90 4')
Red card: Rodrigo Bentancur (Juventus)
What are NFTs?
Are non-fungible tokens a currency, asset, or a licensing instrument? Arnab Das, global market strategist EMEA at Invesco, says they are mix of all of three.
You can buy, hold and use NFTs just like US dollars and Bitcoins. “They can appreciate in value and even produce cash flows.”
However, while money is fungible, NFTs are not. “One Bitcoin, dollar, euro or dirham is largely indistinguishable from the next. Nothing ties a dollar bill to a particular owner, for example. Nor does it tie you to to any goods, services or assets you bought with that currency. In contrast, NFTs confer specific ownership,” Mr Das says.
This makes NFTs closer to a piece of intellectual property such as a work of art or licence, as you can claim royalties or profit by exchanging it at a higher value later, Mr Das says. “They could provide a sustainable income stream.”
This income will depend on future demand and use, which makes NFTs difficult to value. “However, there is a credible use case for many forms of intellectual property, notably art, songs, videos,” Mr Das says.
