Gulfstream, the maker of the G650 business jet, is at risk of losing its dominance in China because of a worsening trade spat with the US.
China’s proposed 25 per cent tariff on US-made aircraft would leave Gulfstream at a disadvantage against competitors from Canada and France. Of the 431 private aircraft based in the country, Gulfstream jets account for 42 per cent followed by 24 per cent for Montreal-based Bombardier and 9 per cent made by France’s Dassault Aviation, consultant Rolland Vincent told Bloomberg.
“They have been the most successful of the manufacturers in penetrating the Chinese market with new aircraft,” Mr Vincent said of Gulfstream, a unit of General Dynamics. “There’s potentially a market-share benefit for Dassault and Bombardier if this tariff goes in.”
The tariffs, outlined by China as part of a $50 billion retaliation against duties on Chinese goods proposed by US President Donald Trump, would add to the hurdles of selling private jets in an already spluttering market, according to Bloomberg. Sales have been under pressure in China in the last couple years after President Xi Jinping began an anti-corruption campaign, said Richard Aboulafia, an aerospace analyst with Teal Group.
“People said, ‘wrong time for a business jet,’ ” Mr Aboulafia said.
The new restrictions on US aircraft have yet to take effect, and there’s a chance they never will if the US and China reach a truce. But tensions have escalated as the nations traded more threats. Mr Trump ordered his administration to consider another $100bn tariffs against China, which prompted the Asian nation to vow it would defend its interests "to the end, and at any cost".
China already has a 17 per cent value-added tax on private aircraft plus a 5 per cent duty on foreign jets, according to the International Trade Administration. The 25 per cent tariff on large Gulfstream models would probably be added to that, said Mr Vincent, who puts out a widely read industry forecast with partner Jetnet called Jetnet iQ.
The duties would be applied to US aircraft weighing between 15,000 kilograms and 45,000 kilograms. All Gulfstream models except for its smallest aircraft, the G280, fit in that weight range.
China deliveries made up 10 per cent of the 80 large aircraft that Gulfstream shipped last year, Mr Vincent said. The company has an even bigger share of planes hit by the tariff. Gulfstream accounts for 112 of those jets, including the G650 and G550, compared with 41 Bombardier jets in the same category and 28 for Dassault.
Gulfstream is expected to begin deliveries this year of two new large aircraft - the G500 and the G600 - that fall in the weight range for the tariff.
The extra levy “would have an immediate effect of curtailing potential sales”, said Steve Varsano, founder of the corporate aircraft brokerage The Jet Business. Although private jets can be registered in one country and used in another, operators in China discovered that authorities frowned on attempts to circumvent the existing 22 per cent tax-and-tariff combination.
“It was a hardship to pay,” Mr Varsano said. “But if you didn’t and were a regular user in China, they made life difficult to get landing slots and parking availability.”
_______________
Read more:
Jet set eschew gold fittings for aviation equivalent of beige
Boeing bags $12.3bn American Airlines deal for 47 Dreamliners
_______________
Business-jet manufacturers will be in Shanghai next week for the annual Asian Business Aviation Conference & Exhibition in Shanghai.
The US' commercial plane maker Boeing, meanwhile, has tamped down fears over the China tariffs threat. After reading the fine print on China’s proposed aircraft tariffs, investors grew less alarmed about the prospect of a trade war.
The threatened 25 per cent levy, based on an aircraft’s weight, targets a generation of Boeing’s 737 jetliners that are nearing the end of their production run. All but one model of Boeing’s newer 737 Max family would be exempt, according to a company document.
"It appears to us that the specific proposals from China this morning are calibrated carefully to avoid a major impact on Boeing and are therefore intended more as a message to the US administration," Seth Seifman, an analyst at JP Morgan, told Reuters.
Separately, Boeing last month ruled out reviving its dormant 767 passenger plane as it continues to ponder options for a potential new niche in the middle of the aircraft market.
"Bringing back the 767 [passenger version] - I just don't see it," said Randy Tinseth, vice-president of commercial marketing.
There has been some speculation Boeing would revive the 767 wide-body passenger line to offer airlines a low-price backstop in case a proposed brand-new mid-market plane suffered delays, or in case Boeing decided not to go ahead with that project.
Boeing continues to target 2024-25 for entry into service of a possible family of jets with 220-270 seats, designed partly to replace single-aisle 757 and some wide-body 767 models.
"If it goes beyond that [date], that would be a challenge as airlines do have to replace those '57s and '67s," Mr Tinseth said.
Boeing says it is examining the business case for such a jet. Mr Tinseth declined to say when it might make a decision, but industry sources say it could start offering the jet this year.
"We continue to make progress on the programme. Things around configuration are coming together," Mr Tinseth said, adding Boeing had not decided whether to offer two engine choices or stick with a single engine maker, as on its 737 and 777.
The mid-market plane would offer 40 per cent lower costs per trip than some wide-bodies - although with shorter range - and it would offer airlines 30 to 40 per cent more revenue than a single-aisle jet "with little or no additional cost".
Airbus says its largest single-aisle, the A321neo, has already scooped up demand in the market above 200 seats.
Mr Tinseth said Boeing was meanwhile making progress in filling a production gap between the current 777 large wide-body model and its proposed 777X replacement, due to enter service in 2020. A contributing factor is a recent surge in cargo demand.
"There are a lot of aircraft in the pipeline right now," he said, adding the wider aircraft market is "very strong".
That strength coincides with a slew of available capital as new investors flood into the aircraft market looking for higher yields, despite the growing prospect of interest rate rises.
"The asset class is real. It's not a niche class any more," said Tim Myers, Boeing Capital president.
"We are in the most liquid financing environment I have ever seen in the industry."
Mr Myers said Boeing was in talks with countries representing some of its suppliers to help provide last-resort export funding. Boeing is discussing potential funding with Australia after Britain and Italy stepped up last year, he said.
Meanwhile, insurance companies could finance 5 per cent of deliveries this year, up from 2 per cent last year, he added.
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
COMPANY%20PROFILE%20
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Five famous companies founded by teens
There are numerous success stories of teen businesses that were created in college dorm rooms and other modest circumstances. Below are some of the most recognisable names in the industry:
- Facebook: Mark Zuckerberg and his friends started Facebook when he was a 19-year-old Harvard undergraduate.
- Dell: When Michael Dell was an undergraduate student at Texas University in 1984, he started upgrading computers for profit. He starting working full-time on his business when he was 19. Eventually, his company became the Dell Computer Corporation and then Dell Inc.
- Subway: Fred DeLuca opened the first Subway restaurant when he was 17. In 1965, Mr DeLuca needed extra money for college, so he decided to open his own business. Peter Buck, a family friend, lent him $1,000 and together, they opened Pete’s Super Submarines. A few years later, the company was rebranded and called Subway.
- Mashable: In 2005, Pete Cashmore created Mashable in Scotland when he was a teenager. The site was then a technology blog. Over the next few decades, Mr Cashmore has turned Mashable into a global media company.
- Oculus VR: Palmer Luckey founded Oculus VR in June 2012, when he was 19. In August that year, Oculus launched its Kickstarter campaign and raised more than $1 million in three days. Facebook bought Oculus for $2 billion two years later.
Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
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
PRIMERA LIGA FIXTURES
All times UAE ( 4 GMT)
Saturday
Atletico Madrid v Sevilla (3pm)
Alaves v Real Madrid (6.15pm)
Malaga v Athletic Bilbao (8.30pm)
Girona v Barcelona (10.45pm)
Sunday
Espanyol v Deportivo la Coruna (2pm)
Getafe v Villarreal (6.15pm)
Eibar v Celta Vigo (8.30pm)
Las Palmas v Leganes (8.30pm)
Real Sociedad v Valencia (10.45pm)
Monday
Real Betis v Levante (11.pm)
Company%20Profile
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SPEC%20SHEET%3A%20NOTHING%20PHONE%20(2a)
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BUNDESLIGA FIXTURES
(All games 4-3pm kick UAE time) Bayern Munich v Augsburg, Borussia Dortmund v Bayer Leverkusen, Hoffenheim v Hertha Berlin, Wolfsburg v Mainz , Eintracht Frankfurt v Freiburg, Union Berlin v RB Leipzig, Cologne v Schalke , Werder Bremen v Borussia Monchengladbach, Stuttgart v Arminia Bielefeld
COMPANY PROFILE
Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed
Korean Film Festival 2019 line-up
Innocent Witness, June 26 at 7pm
On Your Wedding Day, June 27 at 7pm
The Great Battle, June 27 at 9pm
The Witch: Part 1. The Subversion, June 28 at 4pm
Romang, June 28 at 6pm
Mal Mo E: The Secret Mission, June 28 at 8pm
Underdog, June 29 at 2pm
Nearby Sky, June 29 at 4pm
A Resistance, June 29 at 6pm
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.”
Health Valley
Founded in 2002 and set up as a foundation in 2006, Health Valley has been an innovation in healthcare for more than 10 years in Nijmegen, the Netherlands.
It serves as a place where companies, businesses, universities, healthcare providers and government agencies can collaborate, offering a platform where they can connect and work together on healthcare innovation.
Its partners work on technological innovation, new forms of diagnostics and other methods to make a difference in healthcare.
Its agency consists of eight people, four innovation managers and office managers, two communication advisers and one director. It gives innovation support to businesses and other parties in its network like a broker, connecting people with the right organisation to help them further
In-demand jobs and monthly salaries
- Technology expert in robotics and automation: Dh20,000 to Dh40,000
- Energy engineer: Dh25,000 to Dh30,000
- Production engineer: Dh30,000 to Dh40,000
- Data-driven supply chain management professional: Dh30,000 to Dh50,000
- HR leader: Dh40,000 to Dh60,000
- Engineering leader: Dh30,000 to Dh55,000
- Project manager: Dh55,000 to Dh65,000
- Senior reservoir engineer: Dh40,000 to Dh55,000
- Senior drilling engineer: Dh38,000 to Dh46,000
- Senior process engineer: Dh28,000 to Dh38,000
- Senior maintenance engineer: Dh22,000 to Dh34,000
- Field engineer: Dh6,500 to Dh7,500
- Field supervisor: Dh9,000 to Dh12,000
- Field operator: Dh5,000 to Dh7,000
Men’s singles
Group A: Son Wan-ho (Kor), Lee Chong Wei (Mas), Ng Long Angus (HK), Chen Long (Chn)
Group B: Kidambi Srikanth (Ind), Shi Yugi (Chn), Chou Tien Chen (Tpe), Viktor Axelsen (Den)
Women’s Singles
Group A: Akane Yamaguchi (Jpn), Pusarla Sindhu (Ind), Sayaka Sato (Jpn), He Bingjiao (Chn)
Group B: Tai Tzu Ying (Tpe), Sung Hi-hyun (Kor), Ratchanok Intanon (Tha), Chen Yufei (Chn)
MATCH INFO
Group B
Bayern Munich v Tottenham, midnight (Thursday)
COMPANY%20PROFILE
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MATCH INFO
Quarter-finals
Saturday (all times UAE)
England v Australia, 11.15am
New Zealand v Ireland, 2.15pm
Sunday
Wales v France, 11.15am
Japan v South Africa, 2.15pm
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
RESULTS - ELITE MEN
1. Henri Schoeman (RSA) 57:03
2. Mario Mola (ESP) 57:09
3. Vincent Luis (FRA) 57:25
4. Leo Bergere (FRA)57:34
5. Jacob Birtwhistle (AUS) 57:40
6. Joao Silva (POR) 57:45
7. Jonathan Brownlee (GBR) 57:56
8. Adrien Briffod (SUI) 57:57
9. Gustav Iden (NOR) 57:58
10. Richard Murray (RSA) 57:59
The specs
Engine: 3.5-litre V6
Power: 272hp at 6,400rpm
Torque: 331Nm from 5,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.7L/100km
On sale: now
Price: Dh149,000
Brief scores:
Barcelona 3
Pique 38', Messi 51 (pen), Suarez 82'
Rayo Vallecano 1
De Tomas Gomez 24'
Safety 'top priority' for rival hyperloop company
The chief operating officer of Hyperloop Transportation Technologies, Andres de Leon, said his company's hyperloop technology is “ready” and safe.
He said the company prioritised safety throughout its development and, last year, Munich Re, one of the world's largest reinsurance companies, announced it was ready to insure their technology.
“Our levitation, propulsion, and vacuum technology have all been developed [...] over several decades and have been deployed and tested at full scale,” he said in a statement to The National.
“Only once the system has been certified and approved will it move people,” he said.
HyperloopTT has begun designing and engineering processes for its Abu Dhabi projects and hopes to break ground soon.
With no delivery date yet announced, Mr de Leon said timelines had to be considered carefully, as government approval, permits, and regulations could create necessary delays.
