Wizz Air expands cheap flights in Mideast, pledges better service

ABU DHABI, United Arab Emirates – At $157 for a round-trip ticket, Wizz Air’s three-hour flights between Abu Dhabi and Tel Aviv last April were less than half the cost of FlyDubai, El Al and other competitors.

Passengers, however, were crammed into some of the narrowest seats in the industry, flights were habitually late and extra charges piled up for luggage, food and legroom. In February, Wizz Air was rated the U.K.’s worst airline by a consumer organization in terms of boarding, cabin environment and seat comfort.

The Budapest-based carrier’s executives acknowledge the shortcomings and say they’re trying to improve on-time schedules and customer service. At the same time, they suggest that passengers know what they’re getting with the airline’s “ultra low-cost” model – similar to RyanAir, easyJet and Spirit Airlines – and business has never been better.

“I’m actually not too worried about how we are performing,” Johan Eidhagen, managing director of Wizz Air’s Abu Dhabi-based Mideast division, told The Circuit. “But I do understand that, of course, a lot of skepticism comes around being low-cost, of how you can achieve [better service]. And that’s the challenge.”

The airline, which was established as a Hungarian company in 2003, flies to 54 countries and operates 183 aircraft. Its lead investor is Indigo Partners, a Phoenix, Ariz.-based private equity firm that also owns controlling stakes in the U.S. carrier, Frontier Airlines, and Chile’s JetSmart. 

Over the last few years, Wizz has increased flights to the Gulf, particularly the UAE and Saudi Arabia. The airline said in March that it plans to increase its fleet to 200 aircraft this year and 500 by 2030. The Mideast subsidiary, Wizz Air Abu Dhabi, is a joint venture between Wizz Air Holdings and ADQ, a government-owned Abu Dhabi investment company, which owns 51% of the airline. Eidhagen is a Swedish native who joined Wizz Air as a marketing executive in 2015 and previously worked for Nokia.

In July, the U.K’s Civil Aviation Authority said it had received hundreds of complaints about Wizz Air’s failure to reimburse passengers after flight cancellations and delays. It said the airline committed to complying with reimbursement regulations.

Alannah Travers, a communications specialist in the U.K., said she still hasn’t been reimbursed for a  flight she booked and then canceled to the Canary Islands in 2019. Getting any response from the airline’s telephone switchboard required more than an hour on hold. “Technically, I’ve never flown with them, but [the airline has] terrible customer service,” Travers said. Nadine Knotzer, an art gallery owner in Dubai, said high fees for luggage and seat selection on a London to Vienna flight made Wizz Air’s prices more expensive than she expected from a budget airline. “There is nothing cheap about this,” she said.

On the other hand, Salwa Azzam, a magazine editor in Dubai, said she found flying with Wizz Air delightful. “The team on board was incredibly friendly and attentive,” she said. “What surprised me the most was how affordable the tickets were without compromising on the quality of the flight.”

Eidhagen said Wizz Air’s priorities are passenger safety, low prices and on-time performance. “If we can deliver those three most important things,” he said, “then I think we have a strong and good airline.”

NT-Tao seeks to generate nuclear fusion with compact reactors

HOD HASHARON, Israel — Creating a miniature version of the sun in a nondescript office building outside Tel Aviv might be the key to providing cheap, waste-free energy for the entire world.
 
NT-Tao, an Israeli startup led by a former submarine commander, is one of some 30 companies racing to generate energy through nuclear fusion. Its founders are trying to develop fusion reactors small enough to fit in a 40-foot shipping container, but powerful enough that each could provide electricity for 1,000 homes.

After raising $22 million in February from Japan’s Honda Motor Co. and other investors, NT-Tao is looking to grab a modest chunk of what some predict could become a $40 trillion fusion industry. Leaders in the field include Cambridge, Mass.-based Commonwealth Fusion Systems, which is backed by billionaire Bill Gates, and Seattle, -based Helion Energy, which counts Sam Altman, CEO of artificial intelligence pioneer OpenAI, as an investor.

“Fusion energy is really the only abundant source of energy that is clean, and you can get as much as you need,” said CEO Oded Gour-Lavie, who co-founded NT-Tao in 2016 after serving 30 years in the Israeli navy. “There’s nothing coming close to it.” 

One problem: the technology doesn’t quite exist yet. 

When hydrogen gets heated under pressure to around 100 million Celsius, about six times hotter than the sun – even for a fraction of a second – it becomes so hot that the electrons are sheared from the atoms and the nuclei collide with one another. When two nuclei meet and fuse together, an enormous amount of energy is released. Finding a way to capture the energy generated by that fusion could go a long way towards solving the current energy crisis.

At the NT-Tao lab in the Tel Aviv suburb of Hod Hasharon, the hydrogen is heated into plasma, the fourth state of matter after solid, liquid, and gas, which is generated when temperatures exceed 2,700 C. Because temperatures will eventually approach millions of degrees Celsius in the fusion reactor, the plasma must be suspended in space inside a doughnut-shaped experimental tube. Super-powerful copper magnets hold the plasma, which flows in a circle without touching the sides. Plasma makes up 99% of the sun and Gour-Lavie says the process is like creating a miniature sun.

Fusion will be one of the prominent topics at COP28, the United Nations Climate Change Conference, which starts Nov. 30 and will be hosted by the United Arab Emirates. The conference’s president-designate, Sultan Al Jaber, who is also CEO of the Abu Dhabi National Oil Company, spoke at a climate conference in the UAE last month about the “need to keep pushing for breakthroughs in battery storage, expand nuclear, and invest in new energies like fusion.”

The theories underpinning nuclear fusion have been around since the 1940s, but no one has been able to make it work on a significant scale. Last December, the National Ignition Facility in Livermore, Calif., achieved a breakthrough. The experiment set up 192 lasers that were trained on a tiny bit of frozen hydrogen the size of a peppercorn. The combined force of the laser beams created an output of energy that was slightly higher than the input, generating enough excess to boil about two liters of water.  

Stoked by the success, investment firms are pouring more money into the nascent fusion industry, which has already captured some $5 billion in VC funding. The U.S. government has invested about $700 million a year in fusion research since the 1950s. NT-Tao started an affiliation in May with Princeton University and the Princeton Plasma Physics Laboratory, a U.S. Department of Energy facility at the New Jersey campus. It also collaborates with scientists in Israel, the U.K. and Japan.

Nuclear energy used today is generated through fission, which captures the energy that is released when two atoms split. Fission is the technology that produced the atomic bomb that the U.S. dropped on Hiroshima on Aug. 6, 1945. As a nuclear energy source, the downsides of fission include the history of disasters such as the 1986 Chernobyl explosion, the challenge of radioactive waste disposal and the high cost of building a nuclear plant.

“Our vision is really to democratize clean energy worldwide,” said Gour-Lavie, who founded the company with chief scientist Doron Weinfeld and chief technology officer Boaz Weinfeld, who are brothers. NT-Tao’s compact reactors could be distributed in undeveloped areas where a regional power grid doesn’t reach, or to disaster zones where the grid has collapsed. 

Nuclear fusion requires hydrogen, which is accessible in seawater, and a small amount of lithium, which can be mined from deposits across the world.There are no waste products and little danger of explosion, because the moment the plasma stops being heated, the nuclear reaction stops.

NT-Tao is using a hybrid model between two existing technologies for nuclear fusion, the doughnut-shaped Tokamak, a Russian invention from 1958, and the Stellarator, which creates a twisting, circular path for plasma to circulate within a doughnut shape. The company’s name derives from the equation for creating the fusion reaction, where N means density, T means temperature, and Tao is the time that the atoms are confined.

While the company doesn’t expect to have a commercial product until the 2030s, Gour-Lavie, who commanded submarines in the navy, is confident it is on the right path. Shinji Aoyama, senior managing executive officer of Honda, said in February that the company has “high expectations” for NT-Tao. “Honda believes that fusion energy technology will be a breakthrough technology for affordable, stable, clean energy, and we envision this technology will become increasingly important as electrified vehicles become more popular,” he said.

Other experts are intrigued, but wary of attempting to commercialize technology that doesn’t exist yet. “Definitely, there’s potential, and this is why governments and humanity in general are interested in this kind of energy,” said Erez Gilad, a professor of reactor physics who chairs the department of nuclear engineering at Ben-Gurion University in Beersheva, Israel. “However, the way to produce energy from this kind of nuclear reaction, with fusion, is a very long way away,” he said. “We have several major problems to solve before we even start thinking about the application and the engineering challenges of harnessing this kind of energy to produce electricity to the grid and to charge our electrical vehicles.”

According to a survey from the Fusion Industry Association, the first fusion power plants are expected to come online between 2035 and 2050, and will require a $7 billion supply chain. Most attempts are much larger than NT-Tao’s shipping container approach. The ITER Tokamak, a $24 billion, 35-nation experiment in southern France, has been building a 23,000-ton machine since 2010, though it has been troubled by ballooning costs and delays. 

Energy is “at the heart of most of the things that you need to solve,” Gour-Lavie said. “If we make this happen, we can have abundant energy with almost zero waste and it will be relatively cheap. Really, this is about energy being democratized. Nobody sits on the mine of this material. This is in the oceans. Everyone can get this material.”

Dubai’s Ahmed Bin Sulayem reaches out to Tel Aviv

Ahmed Bin Sulayem, who runs diamond, gold and coffee exchanges in Dubai, has a hard time sitting still.

Courting business owners at a seminar in Tel Aviv last week, the 44-year-old CEO of the mammoth Dubai Multi-Commodities Centre repeatedly left his chair up front to take phone calls, visit the espresso bar, snap pictures, send WhatsApp messages, view YouTube videos, play e-games and work the lobby. He conveys the enthusiasm and frenetic air of a man who spends a great deal of time taste-testing the products at the global coffee center he established among the 22,000 businesses that operate at the DMCC, Dubai’s largest free-trade zone.

Decades before the Abraham Accords normalized diplomatic ties between the United Arab Emirates and Israel in 2020, Bin Sulayem regularly slipped into Tel Aviv to meet with traders at the Israel Diamond Exchange, discuss investments in tech startups and surf along the Mediterranean coast. Now he’s coaxing many of the friends he’s made on his trips to set up shop in Dubai and sell to neighboring Arab countries that were previously off-limits to Israelis.

“Israel’s just an amazing market to bounce ideas back and forth and connect with,” Bin Sulayem told The Circuit in an interview after leading the DMCC’s three-hour “Made for Trade Live” road show on Nov. 29 at the Tel Aviv Stock Exchange. “There are so many opportunities that have been uncovered.”

The DMCC, a city within a city made up of 87 office and residential towers with 100,000 people and a large artificial lake, has been promoting its services at similar events in 15 international cities this year, including New York, Miami, London and Paris, as well as in Barcelona, Spain, and Bogota, Colombia.

Besides being home to the Dubai Diamond Exchange, the Dubai Gold and Commodities Exchange and the DMCC Coffee Centre, Bin Sulayem has sought to make the free-trade zone a home for cryptocurrency and e-gaming businesses. The coffee operation, which has facilities for roasting, storage and exporting the commodity around the world, also features a school for baristas. Binance, the world’s largest crypto exchange, established a regional office at DMCC, and Bin Sulayem says he’s friendly with CEO Changpeng “CZ” Zhao, who has been living in the zone amid the crash of FTX, its biggest rival.

Like coffee, diamonds and crypto, Bin Sulayem said gaming “is one of the industries that’s close to my heart” and will play a key role in DMCC’s future growth. “I wasted so many hours as a kid” playing e-games, he said. “Now at least, I can say part of it was research.”

Bin Sulayem, who sports a trim beard and was dressed in an emerald green shirt under a sports jacket at the Tel Aviv event, cultivated an affection for the Los Angeles Lakers as a student at California State University in San Bernardino. His wealth and love of basketball were expressed in 2013, when he took out a full-page ad in the Los Angeles Times paying tribute to NBA superstar Kobe Bryant, who died two years ago in a helicopter accident. Once he came back to the UAE, he went to work for his father, Sultan Ahmed Bin Sulayem, chairman of DP World, the fifth-largest ports operator in the world, who put him in charge of the fledgling DMCC project at age 23.

Shortly afterward, he came to Israel to meet with leaders of the Israel Diamond Exchange and left with the expectation that a peace treaty was two years away. He was off by more than 20 years, but now relishes the ability to visit the country openly.

“Visiting Tel Aviv changed my life,” Bin Sulayem told the more than 200 Israelis whom he welcomed to the DMCC seminar. As a free-trade zone, there are no income taxes for any of the businesses in the DMCC, he explained. Even more important for Israelis, the companies in the DMCC remain wholly owned by the original owners, but are registered as Emirati companies and can therefore do business throughout the Gulf, including in Saudi Arabia, where they would otherwise be barred.

“When you domicile your company in the free zone, you become a UAE company,” Sanjeev Dutta, DMCC’s executive director for commodities and financial services, told the Tel Aviv audience. “For example, you are an Israeli company sending tea to Dubai, and you blend and repack it under your DMCC entity,” he said. “What happens is you say that the product is made in the UAE and then you can reexport those as a UAE company.”

Trade between the UAE and Israel reached $1.2 billion in 2021 and has already topped $1.4 billion this year after the two countries signed a free-trade agreement in May. At the time, Emirati Minister of State for Foreign Trade Thani Ahmed Al Zeyoudi predicted that trade will reach $5 billion within a few years.

As head of one of the 78 Israeli companies that operate in the DMCC, Adi Zamir uses Dubai as a home base for selling diamonds in Asia, cutting travel time to his primary market in India by three hours.

“Dubai is poised to become the center of the diamond trade,” Zamir told The Circuit by telephone from the UAE. “Moving here became possible because of the Abraham Accords, and it is the best way to grow my business.”

Nine months ago, Zamir, 51, packed up his business and moved with his wife and teenage daughters to the DMCC. As a second-generation dealer, he imports rough diamonds from Africa, and sells them in India and other Asian markets.

“When you want to build a serious operation, you need to know the mentality and to be local,” he said. “It’s impossible to create a new platform when you come and go every two weeks. It also means I don’t need to live on an airplane.”

Zamir said he is grateful to Bin Sulayem, whom he described as “incredibly passionate about the work that he and his team do” in helping Israelis set up operations in Dubai.

Zamir has spent much of the last 25 years flying between Israel, Africa, Belgium, Russia and South Africa. Now he travels less, as most of his clients in India are happy to come to Dubai. His daughters are in British schools and have made friends among fellow Israelis and from a range of other nationalities.

“We are enjoying life here,” he said. “It’s a bit expensive but Israel is not less expensive.”

He says the Israeli business community is growing.

“You just need to come and, yalla, you can start doing business,” he said.

Weekly Circuit: Israeli startups shrug off Beyond Meat woes + Lebanon, Israel agree on gas

👋 Good Wednesday morning in the Middle East!

Tel Aviv prides itself as a bastion of vegan cuisine, so it’s not so surprising that the city has spawned a sizable collection of food-tech startups producing plant-based substitutes for meat. As The Circuit finds this week, they’re not daunted by the troubles of industry leader Beyond Meat, which has lost more than 90% of its stock market value over the past three years. Besides companies that are developing non-meat alternatives to farm-grown livestock, we take a look at those pioneering so-called cultivated meat, which is lab-grown from the cells of animals and doesn’t involve their slaughter.

Now that Lebanon and Israel have accepted a U.S.-mediated agreement to resolve their conflict over drilling rights to offshore gas reserves in the Mediterranean, both countries are assessing the potential for profit. Israeli Prime Minister Yair Lapid said yesterday he expects pumping gas from the Karish field to “inject billions” into the economy when it’s exported to a fuel-starved Europe. Lebanon, on the other hand, won’t benefit for at least five or six years from the Qana field as French energy giant Total and Italy’s Eni search for underwater gas deposits.

Oil prices topped the agenda at a meeting in St. Petersburg yesterday between Russian President Vladimir Putin and Sheikh Mohammed bin Zayed Al Nahyan, the UAE president. The Russian leader called attention to Emirati support for last week’s decision by the OPEC+ group to cut oil production by 2 million barrels a day. Now the question arises whether the UAE will also feel the wrath of the Biden administration, which said the U.S. will “reevaluate” the already rocky U.S.-Saudi relationship in light of the oil cut it tried to head off.

Abu Dhabi was in hoops heaven last week as the NBA brought preseason play to the UAE capital. Not hard to spot was 7-foot-1 former superstar Shaquille O’Neal, who shot baskets on an outdoor court near the Etihad Arena, where the Atlanta Hawks swept the two-game series with the Milwaukee Bucks.

Welcome to The Weekly Circuit, where we cover the Middle East through a business and cultural lens. Read on for the stories, deals and players at the top of the news. Please send comments and story tips to [email protected].

The next issue of the The Weekly Circuit will appear Wednesday, Oct. 19, as the holiday season wraps up. The newsletter will return afterwards to its regular publishing schedule on Mondays.

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FUTURE OF FOOD

Eager Israeli food startups shrug off Beyond Meat’s market woes

When Beyond Meat Inc. went public in May 2019, investor excitement over the sizzle of its plant-based burgers sent the stock soaring, giving the California-based company a market value of almost $14 billion. Three years later, the shares have fallen more than 90%, fueling concern about whether consumer demand for meat alternatives will live up to the expectations they’ve generated, Linda Gradstein reports for The Circuit.

Cultivated meat: In Israel, home to a thriving vegan culinary culture and more than 400 food-tech startups, the prevailing outlook is optimistic. While several Israeli companies are producing plant-based versions of beef, chicken and fish – as well as eggs and dairy products – another frontier of so-called cultivated meat, which is made from lab-grown animal cells, is gaining traction. “Plant-based meat as it is today won’t get people to stop eating meat,” Guy Nevo Michrowski, CEO of Israel’s ProFuse Technology, told The Circuit. “The only thing that will get them to switch is something that really tastes like meat, and that is what is already happening.”

Raising funds: ProFuse raised $2.5 million last month in a funding round led by New York’s Green Circle. Investors included Tnuva, one of Israel’s top two food producers; beverage-maker Tempo; OurCrowd, a Jerusalem-based platform for crowdfunded venture capital investment; and Newport Beach, Calif.-based Finistere Ventures.

Changing calculus: ProFuse’s technology, which nurtures the cells in a nourishing liquid, was developed over six years of research at Israel’s Weizmann Institute of Science. The process can potentially enable the large-scale manufacture of meat in bioreactors at a cost similar to producing farm-grown beef, chicken and pork, Stu Strumwasser, managing director of Green Circle, said last month after the new investment was announced. ProFuse’s method “may substantially accelerate that process and thus fundamentally change the calculus for the commercialization of lab-grown meat,” he said.

Lab-grown steak: Another Israeli company working on cultivated meat is Aleph Farms, which gained fame for producing the world’s first lab-grown steak. With actor Leonardo DiCaprio among its investors, Aleph Farms raised $105 million last year to bring its steaks to market by 2023. The funding round was led by DisruptAD, the venture capital platform of the Abu Dhabi sovereign wealth fund ADQ, and the Growth Fund of Greenwich, Conn.-based L Catterton, the largest global consumer-focused private equity firm.

Gulf interest: The United Arab Emirates and Bahrain, which import the vast majority of their food, have been developing partnerships with Israeli food-tech companies since the 2020 Abraham Accords normalized relations between Israel and the two Gulf states. Aleph Farms and DisruptAD have discussed building a manufacturing facility in Abu Dhabi to produce cultivated meat products and sell them across the Gulf.

Read the full story here.

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Abraham Accords Peace Institute signs cooperation deal with Israeli NGO

Seeking to spur dialogue between young Muslim, Jewish and Christian leaders in the Middle East and build on the emerging ties forged by the recent Abraham Accords, the Washington-based Abraham Accords Peace Institute (AAPI) signed a memorandum of understanding with the Tel Aviv-based NGO ISRAEL-is during a special ceremony last weekend in Marrakesh, Morocco.

Taking place on the sidelines of the Leaders of Tomorrow Summit, a forum that brought together young Israeli and Moroccan leaders, the two organizations said the new arrangement would bolster such interactions and help the parties develop sustainable innovation projects, build additional cultural exchanges and promote influencer delegations between Israel and Morocco, as well as two other Arab countries —  the United Arab Emirates and Bahrain.

The UAE and Bahrain signed the Abraham Accords with Israel on Sept. 15, 2020, with Morocco normalizing ties with the Jewish state a few months later. Since then, diplomatic and economic relations have grown steadily.

Asher Fredman, Israel director of AAPI, a nonpartisan, nonprofit organization dedicated to supporting the implementation and expansion of the Abraham Accords, who was present at the weekend seminar, told Jewish Insider that the new cooperation would serve to “strengthen culture, tourism and people-to-people ties.”

“It is an investment in the next generation of leaders in all the countries,” he said, adding that the ultimate goal was to “expand the circle of the Abraham Accords” by showing how peace can create shared opportunities and strengthen societies for the future.

Eyal Biram, co-founder and CEO of ISRAEL-is, which educates and trains young Israelis to conduct meaningful encounters with their international peers, said the cooperation with AAPI was “deeply important.”

“The seeds of this effort were planted by the United States government,” he said. “Every development could not have happened without the support of the U.S., and we are looking forward to creating more wonderful opportunities and building a shared future.”

The two organizations said they will work together to bring regional delegations to Israel to meet with both Jews and Arabs in diverse fields such as politics, business and culture, and to bring Israeli young leaders and prominent figures to the Arab world.

“The key to ensuring that the Abraham Accords continue to flourish for generations is through deepening people-to-people cooperation,” AAPI’s president and executive director, Robert Greenway, said in a statement.

“The decades of political disconnect between Israel and the countries of the Middle East have led too often to misunderstandings, hostility and conflict,” he said. “By working with ISRAEL-is on bringing together young leaders from across the region, we can ensure that the Abraham Accords are not just agreements on paper, but an ongoing paradigm for peace, cooperation and prosperity.”

The Leaders of Tomorrow Summit included some 60 people from Israel and Morocco. Participants engaged in a two-day hackathon to brainstorm ideas and initiatives that could be developed between the two countries.

This story is part of a series on the emerging relationship between Israel-Moroccan following the signing of the normalization agreement in October 2020. Eglash was a guest of ISRAEL-is at the Leaders of Tomorrow Summit in Marrakesh.