FM sector in Saudi Arabia is worth $20-$29 billion

Alistair Stranack, partner and head of Credo Consulting’s Dubai office, speaks at the Facilities Management Leaders’ Summit in Jeddah on Sunday. (AN photo)
Updated 16 January 2017
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FM sector in Saudi Arabia is worth $20-$29 billion

JEDDAH: Saudi Arabia is the largest facilities management (FM) market in the Gulf, representing some 55 percent of spending on the industry in the region, a top FM expert said Sunday at the Facilities Management Leaders’ Summit that opened here.
Richard Naylor, CEO of DTZ, said during the first session of the event, which took place at the Jeddah Center for Forums and Events, that there is huge potential for FM service-providers in the coming years.
The FM market in Saudi Arabia has attracted international newcomers since 2010. “When I first arrived here (in 2010) there were only two other international FM providers, but now there are at least 10 or 12,” Naylor told Arab News. “They see the potential in the market and they want to take advantage of it.”
According to Credo Consulting, the FM market in Saudi Arabia is worth $20-$29 billion per annum. There is 10 percent yearly growth.
One of the tools that are deemed to move the industry forward is the use of technology, which Alistair Stranack, partner and head of Credo Consulting’s Dubai office, said is yet to improve in Saudi Arabia.
He told Arab News the first thing that needs to change is the way FM contracts are structured in the Kingdom.
“What is missing here is the incentive to improve the way you do something to benefit from,” Stranack said. “Technology only works if you use it to improve the way you do things.”
He added that many of contracts now require companies to have a computerized system to record how FM services are provided in real time.
“If you have a system like that, you have to understand how you change your business process in order to become more efficient. If you cannot get any benefit from productivity, there is no point in investing in it,” Stranack said.
As Saudi Arabia moves toward achieving the goals of Vision 2030, changes and improvements are inevitable in different sectors.
Barry Clarke, the speaker at a session highlighting Vision 2030 and its implications on the FM market, said the facilities sector is key to having three Saudi cities among the top 100 in the world, which is one of the aims of Vision 2030.
“One of the reasons I am very enthusiastic about this vision is the quest for quality,” said Clarke, general manager of Macro in Qatar and Saudi Arabia.
He added that the word “quality” was very much emphasized among the goals for Vision 2030. Quality “is an absolute must if we want to achieve the vision and improve our industry.”
He stressed the importance of including more women in the FM industry in order to achieve quality.
“The real drive for quality is women. They have an eye for quality that very few men have,” Clarke said.
The summit comes as part of a three-day event dedicated to FM, cleaning and hygiene in Saudi Arabia.


Lufthansa announces overhaul of budget carrier Eurowings

Updated 24 June 2019
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Lufthansa announces overhaul of budget carrier Eurowings

  • Lufthansa cited falling revenues at Eurowings as a major reason for its warning on full-year profits on June 16
  • Eurowings’ long-haul business would be managed by Lufthansa in the future

BERLIN: Lufthansa on Monday announced a turnaround plan for Eurowings in which the budget carrier will focus on short-haul flights and seek a 15 percent cut in costs by 2022 in the hope of returning to profit.
The German airline cited falling revenues at Eurowings as a major reason for its warning on full-year profits on June 16. Eurowings’ revenue was also forecast to fall sharply in the second quarter.
Lufthansa said its Eurowings fleet would be standardized on the Airbus A320 family and it would seek to boost productivity at Eurowings by limiting itself in Germany to one air operator’s certificate.
Brussels Airlines — the Belgian national flag carrier which Lufthansa took control of in 2016 — would not be integrated into Eurowings, Lufthansa said. A turnaround plan for Brussels Airlines will be announced in the third quarter.
Lufthansa also said it would start pegging its dividend payout ratio to net profit in the future to give the group more flexibility. It would pay out a regular dividend of 20 percent-40 percent of net profit, adjusted for one-off gains and losses.
Lufthansa said Eurowings’ long-haul business would be managed by Lufthansa in the future.
Carsten Spohr, Chief Executive Officer of Lufthansa, said Monday’s announcements sent “a clear signal that this company cares about its shareholders and tries to create value for them.”
Lufthansa said its Network Airlines — made up of Lufthansa, Swiss and Austrian Airlines — would aim to use innovations in sales and distribution to make a contribution to increasing unit revenues by 3 percent by 2022.
Network Airlines will aim to reduce unit costs continuously by 1 to 2 percent annually, the airline said.