The number of passengers using Dubai International Airport grew by 15.6 per cent in the first 11 months of the year compared with the same period a year earlier.
The increase signals traffic gains for Emirates Airline and flydubai as well as the 130 foreign carriers serving the airport.
Passenger numbers reached 42.9 million to the end of last month compared with 37.1m in the corresponding period last year, driven by significant increases in travel to the Indian subcontinent, the GCC and western Europe.
The positive results in Dubai, the largest airport in the Middle East and the fifth-largest international gateway in the world, according to Airports Council International, are being read as an indication that UAE airlines are on track for a positive year after dealing with major uncertainties brought on by the global downturn.
Paul Griffiths, the chief executive of Dubai Airports, said the airport was crossing a "traffic threshold" after passenger numbers surpassed 4 million in October and last month, with a monthly count of 4 million travellers forecast to become the norm next year.
Passenger numbers have gradually picked up after the global downturn, and now airlines expect business travel to be the next step in the recovery.
"It's really about the premium business traffic. It's linked to the strength of the corporate sector, and the pickup in world trade growth, which is continuing," Richard Batty, a strategist at Standard Life Investments in Edinburgh, told Bloomberg.
Revenue at Air France-KLM, for example, is forecast to rise to €27.2 billion (Dh131.29bn) for the year from next April, up 11 per cent on the year to the end of March this year, according to Credit Suisse estimates, largely because of a rise in premium traffic.
Emirates has become one of the most profitable airlines in the post-downturn world, announcing net profit of US$925 million (Dh3.39bn) in its April to September period this year, a fourfold increase on the same period a year ago.
With more than 150 wide-body aircraft in operation, Emirates is preparing to receive significant deliveries from Airbus and Boeing in the next 12 months, enabling additional route launches.
Etihad Airways, after launching operations in 2003 and building up its services to 65 routes as of this month, is on the cusp of reaching financial milestones for this year and next, said James Rigney, the chief financial officer of the airline. "When we take out the aircraft ownership costs and look at the operating performance of the business, we are profitable," he told bankers this month in London. "With a fair wind, we believe, we are on target to break even in 2011," he added.
The budget airline flydubaiis expected to continue its rapid expansion next year. It launched in June last year and now flies to almost 30 cities, including points in Russia, Djibouti and Afghanistan. It has 13 aircraft plans to receive an additional 10 next year, all Boeing 737-800s. The airline is now the second-largest operating from Dubai International Airport.
Air Arabia, which in 2008 many industry analysts said was the world's most profitable airline, plans to continue its regional expansion next year with the opening of its fourth hub, in Jordan. It already has bases in Sharjah, Alexandria and Casablanca.
In October, RAK Airways relaunched operations and now flies to Jeddah, Cairo, Dhaka, Chittagong and Kozhikode.
The International Air Transport Association has warned that while demand for air travel is growing, an increase in fuel prices could pose a challenge for airlines.
igale@thenational.ae
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.”
Other must-tries
Tomato and walnut salad
A lesson in simple, seasonal eating. Wedges of tomato, chunks of cucumber, thinly sliced red onion, coriander or parsley leaves, and perhaps some fresh dill are drizzled with a crushed walnut and garlic dressing. Do consider yourself warned: if you eat this salad in Georgia during the summer months, the tomatoes will be so ripe and flavourful that every tomato you eat from that day forth will taste lacklustre in comparison.
Badrijani nigvzit
A delicious vegetarian snack or starter. It consists of thinly sliced, fried then cooled aubergine smothered with a thick and creamy walnut sauce and folded or rolled. Take note, even though it seems like you should be able to pick these morsels up with your hands, they’re not as durable as they look. A knife and fork is the way to go.
Pkhali
This healthy little dish (a nice antidote to the khachapuri) is usually made with steamed then chopped cabbage, spinach, beetroot or green beans, combined with walnuts, garlic and herbs to make a vegetable pâté or paste. The mix is then often formed into rounds, chilled in the fridge and topped with pomegranate seeds before being served.
The bio
Who inspires you?
I am in awe of the remarkable women in the Arab region, both big and small, pushing boundaries and becoming role models for generations. Emily Nasrallah was a writer, journalist, teacher and women’s rights activist
How do you relax?
Yoga relaxes me and helps me relieve tension, especially now when we’re practically chained to laptops and desks. I enjoy learning more about music and the history of famous music bands and genres.
What is favourite book?
The Perks of Being a Wallflower - I think I've read it more than 7 times
What is your favourite Arabic film?
Hala2 Lawen (Translation: Where Do We Go Now?) by Nadine Labaki
What is favourite English film?
Mamma Mia
Best piece of advice to someone looking for a career at Google?
If you’re interested in a career at Google, deep dive into the different career paths and pinpoint the space you want to join. When you know your space, you’re likely to identify the skills you need to develop.
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now