Above, the Melbourne skyline. Etihad Airways said it has carried nearly 900,000 passengers since launching the Melbourne route in March 2009. Mick Tsikas / Reuters
Above, the Melbourne skyline. Etihad Airways said it has carried nearly 900,000 passengers since launching the Melbourne route in March 2009. Mick Tsikas / Reuters
Above, the Melbourne skyline. Etihad Airways said it has carried nearly 900,000 passengers since launching the Melbourne route in March 2009. Mick Tsikas / Reuters
Above, the Melbourne skyline. Etihad Airways said it has carried nearly 900,000 passengers since launching the Melbourne route in March 2009. Mick Tsikas / Reuters

Etihad to add second daily flight to Melbourne


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Etihad Airways will add an extra 4,500 seats a week to Melbourne when it launches a second daily flight from August, catering to strong demand in the Australian market.

Melbourne, the capital of Victoria, has become one of the strongest routes on the airline's network, said James Hogan, the president and chief executive of Etihad. "Together with Virgin Australia and our other partner airlines, we have built a large and loyal customer base, which has asked us for more choice."

The Abu Dhabi airline said it has carried nearly 900,000 passengers since launching the route in March 2009.

Etihad also owns a 21.24 per cent stake in Virgin Australia, in what is known as an “equity alliance”. Together they offer flights between Abu Dhabi and Sydney, Brisbane and Perth in Australia.

Despite the growth potential coming from Australia, analysts warn against the weaker Australian dollar, which can hurt income in the short-term.

“The increases Etihad has outlined will potentially see it grow over 75 per cent in three years. Depending on what carriers do, Etihad could be one of the ten largest airlines serving Australia,” said Will Horton, a senior analyst at the Centre for Aviation.

“Increased frequency is important for the network. Given the larger landscape of tremendous international growth into Australia, there are near-term pressures on yield exacerbated by weakness in the Australian dollar.”

According to Etihad, Melbourne will now be connected to 50 cities in the Middle East and Europe, including Beirut, Manchester, Dublin and London, which will be served by theA380 super jumbo.

The extra cargo capacity afforded by the flight will benefit Australian meat exporters from Victoria, which is a major meat exporter.

Etihad will deploy a Boeing 777-300ER aircraft for its second flight to Melbourne. The flight will have eight seats in first class, 40 in business and 280 in economy.

selgazzar@thenational.ae

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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.”

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