US chamber inks major deal to spur KSA trade

Updated 20 May 2014

US chamber inks major deal to spur KSA trade

The Council of Saudi Chambers (CSC) signed a memorandum of understanding (MoU) with the US Chamber of Commerce on Thursday to enhance trade cooperation between the two sides and promote investment in both countries for mutual benefits.
The MoU was signed by CSC Vice Chairman Fahad Al-Rabiah and Executive Vice Chairman of the US Chamber of Commerce David Chavern in the presence of Saudi trade attaché in Boston Abdel Al- Mubarak and a group of businessmen from both sides.
The agreement was signed by the CSC on behalf of the Saudi business sector representing the various chambers of commerce and industry of the Kingdom. The US chamber represents the largest organization which represents over 3 million American companies.
Stressing the importance of this agreement in strengthening relations between Saudi Arabia and the United Sates, Al-Rabiah noted that the deal reflects mutual trust in both countries' economies.
He added that Saudi-American relations have witnessed a big leap over the past decades, growing from $160 million in 1970 to more than $76.5 billion in 2012, with the investment credit of American countries in the Kingdom increasing to more than $23 billion.
Chavern described the CSC as a vital partner to enhance cooperation between both countries' business sectors, noting the US chamber's role in encouraging the companies to invest abroad as well as inviting foreign investments into the country.
He revealed that the chamber's current membership exceeds 300,000, allowing access to over 3 million American companies.
The MoU included several key issues of concern to the trade sector, such as exchanging information, exploring opportunities, transferring technology and facilitating business deals and arbitration matters between the two countries.
During the past 10 years, the bilateral trade between the two countries have increased from $26 billion to $74 billion. Some 120 US companies entered the Saudi market in 2013.
Last year, the two-way trade reached $71 billion. And for the first time monthly exports from the United States to the Kingdom topped $2 billion in December. There is a growing demand for American cars, aircraft, machines, renewable energy technologies and large-scale infrastructure in the Kingdom .
Saudi Arabia is the ninth largest trading partner to the United States with $74 billion trade in 2012 and has exhibited a 31 percent increase in the number of exports from the United States to the Kingdom in the period from 2011 to 2012.
The FY-2013 budget projected a spending level of $221 billion, the largest in the Kingdom's history and the financial liquidity generated from oil and gas reserves have resulted in $960 billion worth of projects either planned or under way in the Kingdom.
A significant $700 billion worth of these projects are reserved for mega-projects, making construction, project management, architectural engineering and design, and renewable energy sectors prime opportunities for US companies to consider increasing their investment.

Crisis at India's Jet worsens as it grounds planes, faces strike

The debt-laden carrier has delayed payments to banks, suppliers, pilots and lessors. (Reuters)
Updated 30 min 56 sec ago

Crisis at India's Jet worsens as it grounds planes, faces strike

  • More than 20,000 people are employed in the company
  • The company had to stop more than 50% of their aircraft due to insufficient funds

MUMBAI: India's Jet Airways was fighting multiple crises Wednesday after grounding six planes, leaving it with only a third of its fleet flying, while pilots have threatened to walk out and a major shareholder is reportedly looking to offload its huge stake.

The problems at India's number-two carrier come as other airlines struggle to turn a profit despite the sector rapidly expanding in the country over recent years.

Jet, which employs more than 20,000 people, is gasping under debts of more than $1 billion and has now been forced to ground a total of 78 of its 119 aircraft after failing to pay lenders and aircraft lessors.

In a statement late Tuesday announcing its latest grounding, the firm it said it was "actively engaging" with lenders to secure fresh liquidity and wanted to "minimise disruption".

But with hundreds of customers left stranded, Jet's social media accounts have been flooded with often suddenly stranded passengers demanding information, new flight tickets and refunds.

"@jetairways We book our flights in advance so that we save on travel cost and you are sending cancellation (message) now?", read one irate tweet on Wednesday.

"I have sent a DM (direct message) regarding my ticket details. Please respond!", said Sachin Deshpande, according to his Twitter profile a design engineer.

Another, Ankit Maloo, wrote: "Received an email for all together cancellation of flight days before departure without any prior intimation or communication over phone!"

The firm is also facing pressure from its many pilots who have not been paid on time, with unions threatening they will walk off the job if salaries do not arrive soon.

"Pilots will stop flying jet planes from 1st April 2019 if the company does not disburse due salaries and take concrete decisions," a spokesperson for the National Aviator's Guild, a pilots union, told AFP.

India's aviation regulator on Tuesday warned Jet Airways to ensure that staffers facing stress are not forced to operate flights.

Meanwhile, Bloomberg reported that Etihad Airways of the United Arab Emirates has offered to sell its 24 percent stake in Jet to State Bank of India (SBI).

A collapse would deal a blow to Prime Minister Narendra Modi's pragmatic pro-business reputation ahead of elections starting on April 11.

India's passenger numbers have rocketed six-fold over the past decade with its middle-class taking advantage of better connectivity and cheaper flights.

The country's aviation sector is projected to become the world's third-largest by 2025.

But like other carries, Mumbai-based Jet has been badly hit by fluctuating global crude prices, a weak rupee and fierce competition from budget rivals.

Alarm bells for Jet first rang in August when it failed to report its quarterly earnings or pay its staff, including pilots, on time. It then later reported a loss of $85 million.

In February, it secured a $1.19 billion bailout from lenders including SBI to bridge a funding gap, but the crisis has since deepened.

"Jet Airways is rapidly reaching a point of no return and running out of assets to keep itself afloat," Devesh Agarwal, editor of the Bangalore Aviation website, told AFP.

"The only solution is equity expansion by diluting its stakes but Jet is just trying to cut losses and running out of options," Agarwal said.

Shares in Jet Airways were down more than five percent on Wednesday.