Aircraft and engine manufacturers must focus on tightening quality controls internally, Wizz Air chief executive Jozsef Varadi said, following the incident of an Alaska Airlines Boeing 737 Max jet's cabin panel blowing off mid-air earlier this month.
While Wizz Air is an all-Airbus operator, Mr Varadi said greater scrutiny into quality processes will result in an industry-wide slowdown in production expansion and technological innovations.
“The problem is more around quality. Clearly, the regulator is taking a more scrutinising approach, [and] rightly so … and I think manufacturers of engines and aeroplanes will have to take a more self-help approach to enhance their internal quality control. This is the right step,” Mr Varadi told The National on Thursday.
What takes five years in the R&D cycle now may take 10 years in the future because of the higher level of scrutiny and standards
Jozsef Varadi
“What it means for the industry is that the expansion of manufacturing is going to slow down because of more scrutiny. I also think that technology innovation will slow down.
"What takes five years in the R&D [research and development] cycle now, may take 10 years in the future because of the higher level of scrutiny and standards,” he said.
“We will move slower but with better quality.”
The US Federal Aviation Regulator on Wednesday halted any production expansion of the Boeing 737 Max until quality control issues are resolved. The US aviation regulator's order means that the plane maker can continue producing 737 Max jets at the current monthly rate, but it cannot increase that rate.
The FAA's decision disrupts Boeing's growth plans in a period of soaring demand for aircraft and heated competition with its European arch-rival Airbus amid an unrelenting boom in air travel.
Middle East plans
Wizz Air's boss on Thursday also outlined the low-cost carrier's plans for the Middle East.
The airline will restart some flights from European cities to Tel Aviv starting on March 1, after suspending operations to Israel following the start of the Gaza war in October.
It is returning only 20 per cent of its prewar capacity to the Israeli market with plans to operate three weekly flights each from Budapest, Bucharest, London, Krakow and Rome to Tel Aviv.
The decision to resume some flights to Israel comes after high levels of scrutiny into security and safety and a “much improved situation for flying”, but demand will restart from a relatively lower base, Mr Varadi said.
“It will be a skeleton network with skeleton frequencies, so we would have roughly 20 per cent of the previous capacity prior to the war and we think demand will gradually come back up and we will be adding capacity accordingly,” he said.
“The demand we're seeing is essentially Israelis flying in and out … we are not yet seeing demand for tourism.”
Demand is expected to build up gradually within six to nine months, he added.
Travel demand for the Middle East region is broadly unaffected by the Israel-Gaza war, with no impact seen in markets such as the UAE and Saudi Arabia, but the airline continues to monitor the situation, Mr Varadi said.
Dubai-based Emirates has suspended flights to Tel Aviv, while its sister airline flydubai operates four flights a day to Ben Gurion Airport but continues to monitor the situation closely and amend its schedule accordingly.
'Flat' capacity
Wizz Air is one of the airlines facing disruptions from grounding its Airbus narrow-body aircraft because of mandatory inspections of Pratt & Whitney’s geared turbofan engines. The engine maker said they were at risk due to a powder metal defect that could lead to the cracking of some engine components.
“We are expecting capacity to be largely flat in the next financial year and this is the guidance we're giving to the market,” Mr Varadi said.
However, there are some variations by market, with Wizz Air Abu Dhabi to grow capacity by 25 per cent in the next financial year to pursue growth opportunities, he said.
“We're very excited about the Abu Dhabi opportunities and we continue to push for growth in the market,” Mr Varadi said.
“The Middle East, especially the Gulf, will remain growth markets for Wizz Air.”
Wizz Air Abu Dhabi, a joint venture between Hungary's Wizz Air Holding and Abu Dhabi state holding company ADQ, in November operated its first flight from Abu Dhabi International Airport's new Terminal A.
The outlook
Wizz Air posted a net loss of €105.4 million ($115 million) in the third quarter, compared with €33.5 million in profit in the same period last year, it said on Thursday.
The airline's fiscal year ends in March 31.
This was mainly due to disruptions from grounding some aircraft and removing capacity from the Israeli market, Mr Varadi said.
However, the airline maintained its full-year net income guidance range of €350 million to €400 million, supported by positive trading, higher utilisation of operational fleet, one-off benefits from the engine maker cost compensation and credits from deferred sale and leaseback transactions materialising in the fourth quarter.
“I’d say that we’re back into solid profitability,” Mr Varadi said of the fiscal year.
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
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KILLING OF QASSEM SULEIMANI
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Babumoshai Bandookbaaz
Director: Kushan Nandy
Starring: Nawazuddin Siddiqui, Bidita Bag, Jatin Goswami
Three stars
Other key dates
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Finals draw: December 2
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Finals (including semi-finals and third-placed game): June 5–9, 2019
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Euro 2020 play-off draw: November 22, 2019
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Euro 2020 play-offs: March 26–31, 2020
Ziina users can donate to relief efforts in Beirut
Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”
Fast%20X
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Mohammed bin Zayed Majlis
Countries offering golden visas
UK
Innovator Founder Visa is aimed at those who can demonstrate relevant experience in business and sufficient investment funds to set up and scale up a new business in the UK. It offers permanent residence after three years.
Germany
Investing or establishing a business in Germany offers you a residence permit, which eventually leads to citizenship. The investment must meet an economic need and you have to have lived in Germany for five years to become a citizen.
Italy
The scheme is designed for foreign investors committed to making a significant contribution to the economy. Requires a minimum investment of €250,000 which can rise to €2 million.
Switzerland
Residence Programme offers residence to applicants and their families through economic contributions. The applicant must agree to pay an annual lump sum in tax.
Canada
Start-Up Visa Programme allows foreign entrepreneurs the opportunity to create a business in Canada and apply for permanent residence.
Results
2pm: Serve U – Maiden (TB) Dh60,000 (Dirt) 1,400m; Winner: Violent Justice, Pat Dobbs (jockey), Doug Watson (trainer)
2.30pm: Al Shafar Investment – Conditions (TB) Dh100,000 (D) 1,400m; Winner: Desert Wisdom, Bernardo Pinheiro, Ahmed Al Shemaili
3pm: Commercial Bank of Dubai – Handicap (TB) Dh68,000 (D) 1,200m; Winner: Fawaareq, Sam Hitchcott, Doug Watson
3.30pm: Shadwell – Rated Conditions (TB) Dh100,000 (D) 1,600m; Winner: Down On Da Bayou, Xavier Ziani, Salem bin Ghadayer
4pm: Dubai Real Estate Centre – Maiden (TB) Dh60,000 (D) 1,600m; Winner: Rakeez, Patrick Cosgrave, Bhupat Seemar
4.30pm: Al Redha Insurance Brokers – Handicap (TB) Dh78,000 (D) 1,800m; Winner: Capla Crusader, Bernardo Pinheiro, Rashed Bouresly
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
In numbers
- Number of children under five will fall from 681 million in 2017 to 401m in 2100
- Over-80s will rise from 141m in 2017 to 866m in 2100
- Nigeria will become the world’s second most populous country with 791m by 2100, behind India
- China will fall dramatically from a peak of 2.4 billion in 2024 to 732 million by 2100
- an average of 2.1 children per woman is required to sustain population growth
Evacuations to France hit by controversy
- Over 500 Gazans have been evacuated to France since November 2023
- Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
- The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
- Artists and researchers fall under a programme called Pause that began in 2017
- It has benefited more than 700 people from 44 countries, including Syria, Turkey, Iran, and Sudan
- Since the start of the Gaza war, it has also included 45 Gazan beneficiaries
- Unlike students, they are allowed to bring their families to France
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
RESULTS
Dubai Kahayla Classic – Group 1 (PA) $750,000 (Dirt) 2,000m
Winner: Deryan, Ioritz Mendizabal (jockey), Didier Guillemin (trainer).
Godolphin Mile – Group 2 (TB) $750,000 (D) 1,600m
Winner: Secret Ambition, Tadhg O’Shea, Satish Seemar
Dubai Gold Cup – Group 2 (TB) $750,000 (Turf) 3,200m
Winner: Subjectivist, Joe Fanning, Mark Johnston
Al Quoz Sprint – Group 1 (TB) $1million (T) 1,200m
Winner: Extravagant Kid, Ryan Moore, Brendan Walsh
UAE Derby – Group 2 (TB) $750,000 (D) 1,900m
Winner: Rebel’s Romance, William Buick, Charlie Appleby
Dubai Golden Shaheen – Group 1 (TB) $1.5million (D) 1,200m
Winner: Zenden, Antonio Fresu, Carlos David
Dubai Turf – Group 1 (TB) $4million (T) 1,800m
Winner: Lord North, Frankie Dettori, John Gosden
Dubai Sheema Classic – Group 1 (TB) $5million (T) 2,410m
Winner: Mishriff, John Egan, John Gosden
88 Video's most popular rentals
Avengers 3: Infinity War: an American superhero film released in 2018 and based on the Marvel Comics story.
Sholay: a 1975 Indian action-adventure film. It follows the adventures of two criminals hired by police to catch a vagabond. The film was panned on release but is now considered a classic.
Lucifer: is a 2019 Malayalam-language action film. It dives into the gritty world of Kerala’s politics and has become one of the highest-grossing Malayalam films of all time.
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.”
