Gulf Air said engine maker Rolls-Royce must quickly fix the durability issues on the Trent 1000 engines powering its Boeing 787-9 wide-body aircraft, which are imposing constraints on the airline as it maps out network expansion.
The Manama-based airline has undertaken a network revision that will result in axing unprofitable routes and 25 per cent more destinations being added in the next five years, Jeffrey Goh, chief executive of Gulf Air Group Holding, told The National on the sidelines of the Routes World conference in Bahrain.
However, Gulf Air has had to reduce flight frequencies and cancel or delay some flights as a result of the persistent engine issues that are grounding some of its wide-body aircraft while the engines are in the repair shop, he said.
The airline called on the UK engine builder to address its issues as more predictability and efficiency is required to plan the growth of its network.
“Rolls-Royce doesn't have a solution for its Trent 1000 engines, which means there has been frequent grounding of aircraft. We are not the only airline,” Mr Goh said.
“Rolls-Royce has to expedite a solution.”
The industry continues to face “chronic challenges” in terms of aircraft availability and these supply chain issues are likely to persist for the next two years, he said.
“Our view is that things have not improved and certainly for our wide-body operations things have become worse,” he said.
“That means capacity is going to be constrained going forward and we are pushing Rolls-Royce very hard to have a solution with the engine problems, but we're not seeing much happiness in the horizon.”
Rolls-Royce's response to the airline's concerns has been a “statement that is filled with hopes but what we want is delivery.”
The so-called “time on wing” for the Rolls-Royce Trent 1000 engine is very short and there are challenges with defects on engine parts that require replacing, leading to more downtime for the engines. Time on wing is a measure of the operational reliability of a jet engine.
“We have run into double-digit percentages of the number of engine changes we've had to make on the 787s year-on-year,” Mr Goh said.
“That means downtime of the aircraft, more resources being dedicated to just changing the engines and many of these engines that go into the work shops stay there for a long time – and when they do come out, a certain percentage of those will have to go back in.”
Gulf Air currently has 10 Boeing 787s in its fleet and will take delivery of two more of these Dreamliners by the end of 2026.
Gulf Air operates a fleet of 32 Airbus A320-family aircraft and 10 Boeing 787-9s. It expects delivery of another nine A320-family aircraft and two 787-9s to join the fleet.
Route network 'recalibration'
Gulf Air flies to about 60 destinations today and expects to add 25 per cent more to its network within five years.
“We have completed our network review and we have begun to execute on the new network map that we have that will take us to the next four to five years, always subject to availability of aircraft of course,” Mr Goh said.
“Hopefully by the end of this year or the beginning of next year we will be announcing additional destinations.”
Gulf Air wants to boost its presence in key financial hubs, strong leisure markets and major pilgrimage centres.
The airline has launched new routes including to the Chinese cities of Shanghai and Guangzhou and Munich. At the same time, the airline has cut four points in Pakistan as part of its network recalibration.
Gulf Air had also launched routes to Najaf and Baghdad, though flights to the Iraqi cities has been suspended because of the conflicts in the Middle East.
Sharing information on flight risk assessment
Concerns over a wider conflict in the Middle East have prompted international airlines to suspend flights to the region or to avoid affected air space.
“It has impacted our operations and it has impacted customer travel plans because we have had to cancel flights, we've had to divert flights and we've had to do additional stops to carry extra fuel to continue operations just to avoid airspace that should be avoided,” Mr Goh said.
Airlines in the region are co-operating on sharing information about risk assessment for flights as safety and security of aircraft, crew, passengers and operations are a non-competitive issue.
“There is active, continuous conversations between the airlines in the region in understanding the intelligence related to safety of operations … so we all learn from each other because safety and security is always paramount for us and we want to make sure we cover every angle of the risk assessment. The more we know, the better we can plan and react to that.”
Safety is paramount even if it means inconvenience, disruption of operations, positioning of aircraft and the additional cost of rerouting flights, he said.
The higher costs is a “crease in the cloth and we are hoping it will not be a permanent situation … any airline operation should be able to absorb these temporary airline disruptions,” Mr Goh said.
Dealing with wars, pandemics and supply chain woes is a testament to the strength of the airline industry.
“There is no more greater testament to the resilience of the airline industry than from the Covid crisis we've had. And having emerged from Covid, we thought life would be better and now we're running into a different kind of crisis, which is the global supply chain crisis. We are all counting on the resilience of airlines to make sure we come out of this, as the industry has done for more than 100 years of commercial flying.”
Production issues and delivery delays at Boeing and Airbus have made it difficult for airlines to fully capitalise on strong demand for air travel.
Asked about the efforts of Boeing's new chief executive Kelly Ortberg in turning around the company during its safety and quality crisis, Mr Goh said it is “early days to make a fair assessment of whether or not the initiatives that the new CEO has in place will bear fruit. He is fairly new … it will take some time for changes to happen”.
Dhadak
Director: Shashank Khaitan
Starring: Janhvi Kapoor, Ishaan Khattar, Ashutosh Rana
Stars: 3
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 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
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
UAE currency: the story behind the money in your pockets
The specs: 2019 Mini Cooper
Price, base: Dh141,740 (three-door) / Dh165,900 (five-door)
Engine: 1.5-litre four-cylinder (Cooper) / 2.0-litre four-cylinder (Cooper S)
Power: 136hp @ 4,500rpm (Cooper) / 192hp @ 5,000rpm (Cooper S)
Torque: 220Nm @ 1,480rpm (Cooper) / 280Nm @ 1,350rpm (Cooper S)
Transmission: Seven-speed automatic
Fuel consumption, combined: 4.8L to 5.4L / 100km
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
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
WRESTLING HIGHLIGHTS
What vitamins do we know are beneficial for living in the UAE
Vitamin D: Highly relevant in the UAE due to limited sun exposure; supports bone health, immunity and mood.
Vitamin B12: Important for nerve health and energy production, especially for vegetarians, vegans and individuals with absorption issues.
Iron: Useful only when deficiency or anaemia is confirmed; helps reduce fatigue and support immunity.
Omega-3 (EPA/DHA): Supports heart health and reduces inflammation, especially for those who consume little fish.
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.”
Know your cyber adversaries
Cryptojacking: Compromises a device or network to mine cryptocurrencies without an organisation's knowledge.
Distributed denial-of-service: Floods systems, servers or networks with information, effectively blocking them.
Man-in-the-middle attack: Intercepts two-way communication to obtain information, spy on participants or alter the outcome.
Malware: Installs itself in a network when a user clicks on a compromised link or email attachment.
Phishing: Aims to secure personal information, such as passwords and credit card numbers.
Ransomware: Encrypts user data, denying access and demands a payment to decrypt it.
Spyware: Collects information without the user's knowledge, which is then passed on to bad actors.
Trojans: Create a backdoor into systems, which becomes a point of entry for an attack.
Viruses: Infect applications in a system and replicate themselves as they go, just like their biological counterparts.
Worms: Send copies of themselves to other users or contacts. They don't attack the system, but they overload it.
Zero-day exploit: Exploits a vulnerability in software before a fix is found.
Another way to earn air miles
In addition to the Emirates and Etihad programmes, there is the Air Miles Middle East card, which offers members the ability to choose any airline, has no black-out dates and no restrictions on seat availability. Air Miles is linked up to HSBC credit cards and can also be earned through retail partners such as Spinneys, Sharaf DG and The Toy Store.
An Emirates Dubai-London round-trip ticket costs 180,000 miles on the Air Miles website. But customers earn these ‘miles’ at a much faster rate than airline miles. Adidas offers two air miles per Dh1 spent. Air Miles has partnerships with websites as well, so booking.com and agoda.com offer three miles per Dh1 spent.
“If you use your HSBC credit card when shopping at our partners, you are able to earn Air Miles twice which will mean you can get that flight reward faster and for less spend,” says Paul Lacey, the managing director for Europe, Middle East and India for Aimia, which owns and operates Air Miles Middle East.
UAE currency: the story behind the money in your pockets
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
HUNGARIAN GRAND PRIX RESULT
1. Sebastian Vettel, Ferrari 1:39:46.713
2. Kimi Raikkonen, Ferrari 00:00.908
3. Valtteri Bottas, Mercedes-GP 00:12.462
4. Lewis Hamilton, Mercedes-GP 00:12.885
5. Max Verstappen, Red Bull Racing 00:13.276
6. Fernando Alonso, McLaren 01:11.223
7. Carlos Sainz Jr, Toro Rosso 1 lap
8. Sergio Perez, Force India 1 lap
9. Esteban Ocon, Force India 1 lap
10. Stoffel Vandoorne, McLaren 1 lap
11. Daniil Kvyat, Toro Rosso 1 lap
12. Jolyon Palmer, Renault 1 lap
13. Kevin Magnussen, Haas 1 lap
14. Lance Stroll, Williams 1 lap
15. Pascal Wehrlein, Sauber 2 laps
16. Marcus Ericsson, Sauber 2 laps
17r. Nico Huelkenberg, Renault 3 laps
r. Paul Di Resta, Williams 10 laps
r. Romain Grosjean, Haas 50 laps
r. Daniel Ricciardo, Red Bull Racing 70 laps
