Emirates’ Clark sees profitable future once Gulf crisis subsides

Emirates boss Tim Clark said he expects the carrier to become the “most profitable airline” in the world by the end of this year, despite disruptions from the Iran war, pointing to its history of restoring operations quickly and a ready supply of jet fuel.

“What we have found is that whenever we’ve been through these traumas before, the strength of demand [remains] so strong,” Clark said in an address to the the Centre for Aviation’s Airline Leader Summit in Berlin on Thursday.

He added that Emirates had “earned our skills” more than any other because “We’ve been subjected to all sorts of things over the last 20 to 30 years.”

Clark’s bold tone amid a growing crisis in the global aviation sector can partly be explained by Emirates’ ability to access the UAE’s plentiful fuel supply, giving it a competitive edge over many airlines in Europe and Asia, which are facing shortages.

“Frankly, we’re not that concerned, [as] we’ve got adequate supplies over here [in the UAE]. We produce and refine our own Jet A-1 fuel,” Clark said.

Emirates is now operating at more than 65% of its capacity and Clark said it would only take one to two months to restore operations to normal once the conflict was resolved.

He said the airline continued to refine its offerings and was working on upgrades to First Class cabins, including adding ensuite bathrooms.

UAE imposes entry ban on Iranians – but with exceptions

The UAE has issued an advisory banning Iranian nationals from entering or transiting through the country, with a few exceptions.

The restrictions come amid heightened tensions from the Iran war, with airlines and travel advisories adjusting policies rapidly.

Emirates airline said that those who have a Golden Visa, are married to UAE nationals or born to an Emirati woman will be allowed in, as well as athletes, bank executives, doctors, families, engineers, investors, senior professionals or traders.

The UAE, a key global aviation hub, serves as a major transit point for international travelers, meaning that restrictions on certain nationalities can ripple across regional travel and airline operations.

Travelers are urged to review the latest entry requirements before booking or flying, as rules may change rapidly due to regional developments, the airline said. 

Emirates commits $12 billion to new Al Maktoum International

Emirates will invest up to $12 billion in Al Maktoum International as part of the Dubai government’s $35 billion redevelopment of the site, which is slated to replace DXB as the emirate’s main aviation hub by 2032.

Sheikh Ahmed bin Saeed, Chairman and CEO of Emirates Group, said total spending will far exceed the headline figure.

He said Emirates plans to finance its share of the investment through a combination of cash reserves and new debt.

Moreover, U.K. Export Finance, the government-backed export credit agency, announced during the Dubai Airshow that it will invest $3.5 billion to support the participation of the U.K. businesses in the new airport. 

Qatar’s Hamad International Airport to boost capacity by 20%

Doha’s Hamad International Airport, the second busiest in the region, plans to increase its annual capacity by nearly 20% using the existing infrastructure.

The strategy outlined by Chief Operating Office Hamad Al-Khater contrasts with its rival Dubai International Airport, which is spending $35 billion on a new terminal to handle 260 million passengers.

“We believe we can even fit 75 to 77 million passengers within the current footprint of the airport,” Al-Khater told Bloomberg. “It needs a lot of work, a lot of optimization, but that is our primary goal.”

Last year, Doha’s airport handled some 53 million passengers, making it the tenth busiest airport in the world by international traffic, ahead of Bangkok, Madrid and Munich.

Kuwait Airways break-even goal hit by delays, Mideast tensions

Delivery delays from Airbus and regional geopolitical instability are hampering Kuwait Airways’ efforts to break even and attract more passengers.

Chairman Abdulmohsen Alfagaan told Reuters that the carrier currently operates 27 aircraft, down from a plan of 33 for 2024, and expects to reach only 30 by year-end, with full deliveries delayed until 2027.

Kuwait Airways will not be able to reach its goal of 5.5 million passengers this year, up from 4 million in 2024.

Alfagaan said the company’s 2025 break-even target is at risk.

Emirates Group launches global hiring campaign to fill 17,300 jobs

Emirates Group has launched a global talent drive to support expansion, with plans to hire 17,300 people across 350 different roles this year.

Recruits are being sought across Emirates airline and the dnata ground-handling unit, from cabin crew, pilots and engineers to IT, human resources and finance roles.

The company, which already has a 121,000-strong workforce, will host open days and other recruitment events across 150 cities including the UAE, The National reports.

Emirates airline posted its third consecutive year of record profits last year, with a post-tax profit of AED19.1billion ($5.2 billion) for the year ended in March.

It paid out a generous 22-week bonus to eligible employees following the result.

Egypt to open 11 key airports to private sector investment

Egypt is preparing to open up the operations of 11 major airports to private investment, aiming to modernize the country’s aviation infrastructure and reach its goal of attracting 30 million tourists annually.

Backed by the World Bank’s International Finance Corp., the plan focuses on boosting efficiency and service standards while keeping state ownership intact.

Egyptian President Abdel Fattah Al-Sisi reviewed the strategy over the weekend, endorsing a timeline that begins with offering Hurghada airport on the Red Sea to the private sector by the end of 2025.

The initiative is set to be finalized next summer.

Saudis sign deals for over 100 planes as Paris Air Show opens

AviLease has signed a deal for up to 77 Airbus planes, announced as the Paris Air Show opened at Le Bourget on Monday.

The global aircraft lessor backed by Saudi Arabia’s Public Investment Fund signed up for an initial 30 A320 Neo jets and 10 A350F freighters, which could increase to 55 A320 Neos and 22 A350Fs.

Riyadh Air, Saudi’s new national carrier, also backed by the sovereign wealth fund,  announced an order of 25 A350-1000 aircraft at the event on Monday.

Meanwhile, Royal Air Maroc is nearing a major fleet renewal deal with Boeing as it moves to quadruple its fleet by 3030 ahead of co-hosting the World Cup.

The deal could include more than 70  787s and 737 jets, Reuters reports. The airline is also planning a smaller order for 20 Airbus A220s, its first Airbus deal in nearly 25 years.

The Paris Air Show opened against a somber backdrop following last week’s Air India crash and disruptions caused by rising tensions between Israel and Iran.

Boeing CEO Kelly Ortberg and Commercial Airplanes chief Stephanie Pope have cancelled their trip to Paris, with Boeing scaling back its presence to focus on the India crash probe.

Boeing’s branding remained highly visible at the show, including a gleaming Riyadh Air 787 parked behind its chalet at Le Bourget, Reuters reported.

Airline execs descend on Dubai for IATA annual meeting

Over 1,500 airline executives will descend on Dubai, the world’s busiest international travel hub, this weekend, for the annual meeting of the International Air Transport Association.

The industry trade organization, which represents more than 300 airlines and over 80% of global air traffic, expects to grapple with airline chiefs’ biggest challenges over the three-day gathering.

At the top of the agenda are aircraft shortages, geopolitical tensions and carbon reduction strategies as declining airfares spell out a muted outlook for carriers.

The 80th IATA Annual General Meeting and World Air Transport Summit, hosted by Emirates Airline, will run from Sunday, June 2 through Tuesday, June 4, and is for the first time taking place in the UAE.

Expected to attend are CEOs including Vanessa Hudson of Qantas; Tim Clark of Emirates Airline; Scott Kirby, of United Airlines and Shai Weiss of Virgin Atlantic Airways.

Aviation is a linchpin of Dubai’s economic ambitions: the industry contributed 27% to the emirate’s GDP and supported $37 billion in gross value added in 2023.

That is projected to increase to $53 billion in 2030, in line with Dubai’s growth forecast, according to Oxford Economics. 

The Weekly Circuit: Dubai Airshow + Saudi Arabia’s super-fast supercomputer

👋 Hello from the Middle East!

Checkbooks are out as the blockbuster Dubai Airshow is underway this week. One of the world’s biggest events on the aviation calendar, the biennial Dubai exhibition has come a long way since its humble beginnings as a smaller trade show in 1989 with 200 exhibitors and 25 aircraft. This 18th edition has seen over 100,000 attendees flock to a purpose-built site on the outskirts of Dubai with two more days to go.

The Dubai government is planning to sell a 25% stake in Dubai Taxi Co. as it revives a privatization push first announced two years ago. The sale on the local exchange, set to be priced on Nov. 21, could raise up to $300 million, Bloomberg reports. The overall outlook for public markets in the Gulf is largely optimistic, according to a recent report from EY, citing a large pipeline of planned IPOs – particularly on the Saudi Tadawul exchange – going into 2024. However, the audit firm noted a risk of ongoing geopolitical challenges, which are “adversely [impacting] investor sentiment.”

Saudi Arabia’s supercomputer Shaheen III was named the fastest in the Middle East by TOP500, a German group that tracks the computing power of systems worldwide. Developed by Hewlett Packard Enterprise, Shaheen III is housed at Saudi Arabia’s King Abdullah University of Science and Technology (KAUST). Its processing power exceeds that of 500,000 latest-generation MacBook Pros operating simultaneously. According to Tony Chan, president of KAUST, the plan is to use the supercomputer to support the university’s research in areas like alternative fuels and carbon sequestration.

Family investment offices will be a prominent feature during Abu Dhabi Finance Week at the end of this month. More than 300 leaders of the industry and government officials from 17 countries are expected to participate in the Nov. 28 inaugural International Family Office Congress, according to a statement. Some 80% of the UAE’s private sector are family businesses and the global family office industry is worth hundreds of billions of dollars, the conference organizers said.

Masdar, the UAE’s sustainable energy company, is considering acquisitions in the U.S. and Europe while looking for prospective partners in China. COO Abdulaziz Alobaidli discussed the company’s expansion plans with The National and said the changes would be “transformative.” In advance of hosting the U.N.’s COP28 environmental conference in two weeks, the UAE government publicized a set of principles on the “minimum standards for the management of climate-related financial risks for all financial sector entities” operating in the country.

Welcome to The Weekly Circuit. Read on for the stories, deals and players driving the news across the MENA business landscape. Please send comments and story tips to [email protected].

DUBAI AIRSHOW

UAE stages aviation extravaganza, overcoming rivals and regional tension

Dubai’s aviation industry shrugged off new regional rivals and emerging security concerns in the Middle East to stage this week’s event. Organizers tallied more than $50 billion in new aircraft orders from Boeing, Dubai raised its forecast for traffic through its world-leading airport and IPO prospects for  flag carrier Emirates generated substantial buzz, The Circuit’s Kelsey Warner reports. 

Big numbers: Dubai Airports announced it is expecting record-breaking numbers to continue in the fourth quarter and into 2024 with annual passenger traffic at Dubai International (DXB) reaching  reach 86.8 million – surpassing 2019. “We’re thrilled but not entirely surprised that DXB is all set to surpass the pre-pandemic milestone well ahead of our initial projections by almost a year,” Paul Griffiths, CEO of Dubai Airports, said in a statement.

Top traffic: India was DXB’s top country destination in terms of traffic volume with 8.9 million passengers in the first nine months of the year, followed by Saudi Arabia with 4.8 million passengers and the UK with 4.4 million. 

Mega-deals: Shares of Boeing popped on the New York Stock Exchange, up 4% on Monday, and have stayed buoyant as government-owned Emirates and sister airline flydubai secured 125 Boeing wide-body jets at the opening of the airshow, leading a week of mega-deals in commercial and defense aviation that typically sees the biggest agreements inked in the first two days.

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