Qatar Airways faces tough headwinds due to new restrictions

Qatar Airways faces tough headwinds due to new restrictions
A man stands outside the Qatar Airways branch in Riyadh on June 5, after the carrier suspended all flights to Saudi Arabia following a severing of relations between major Gulf states and Doha. (AFP)
Updated 06 June 2017

Qatar Airways faces tough headwinds due to new restrictions

Qatar Airways faces tough headwinds due to new restrictions

DUBAI: Qatar Airways, the second-biggest carrier in the Arabian Gulf, will face tough operational and financial headwinds as a result of restrictions placed on it by several other Arab nations, and the pressure will grow the longer the diplomatic fracture goes on, aviation analysts said.
All flights between four countries — Saudi Arabia, the UAE, Bahrain and Egypt — and Qatar are cancelled for an indefinite period from June 6, and Qatar Airways flights will not be allowed to fly over the airspace of those four nations.
Saj Ahmad, chief analyst at StrategicAero Research consultancy in London, said: “Qatar Airways will be hit hardest since it will have to reroute flights (that previously flew) over Saudi Arabia and the UAE on its long-haul missions — adding fuel, time and costs. Equally, its narrow-body fleet will end up parked at Doha, and ramp space there is not exactly plentiful — so again, they will have to redeploy them somewhere, if at all possible.”
Citibank, the American financial giant, said: “Loss of routes and the requirement to detour neighbors’ airspace could have a significant long-term impact on Qatar Airways business.”
That was echoed by John Strickland, independent aviation expert at JLS Consulting. “Much depends on how long (the dispute) goes on. We have not heard the final story yet. But the longer it goes the worse it is for Qatar,” Strickland told Arab News.
“The ban on ‘in’ and ‘out’ flights will obviously have an immediate impact, but the restrictions also inhibit operational flexibility on overflights through the other countries. Qatar files to Europe, Africa and the Americas, and all are affected by the ban on airspace in the region.”
Qatar seemed on Monday to have already begun avoiding the airspace of the countries that imposed the ban. Social media websites showed air maps of Qatar Airways planes en route to the west flying over the Arabian Gulf, heading towards Iran and Iraq, before turning westward toward Europe and America.
Strickland such operational adjustments would become more problematic. “Some alternative routings will be much more difficult. For example, routes to South America have to go over Saudi Arabia or Egypt. Rerouting will bring its own clear challenges. It may not be possible to fly nonstop, and then Qatar will have to think about new refueling facilities on the ground.”
He said that the restrictions could also put a brake on Qatar’s ambitious aviation expansion plans. “Qatar Airways has been a carrier in expansive mode, operating from a new state-of-the-art airport. The restrictions will have a significant effect on all that.”
Other Gulf airlines will also feel the effect, though to a more limited degree, Strickland said.
“Of course, not flying to Doha means passengers will have to find alternative connections to get to and from there. That won’t be cheap or easy,” he said.
“The longer this spat lasts, the more damaging it will be for everyone — and it will be passengers who suffer most,” he added.
The latest turbulence comes after a year of challenges for the Gulf aviation business, with testing competitive conditions compounded by security fears in the region and in Europe, as well as the laptop ban first imposed on some regional airports by the American authorities.
But Ahmad does not believe the recent problems marked the end of the “super connector” model adopted by Emirates, Etihad and Qatar Airways.
“There is simply too much demand going through hubs like Dubai for traffic to suddenly halt. And let us face it, there has been no cataclysmic move that would hurt demand; even the laptop ban has not put off other travelers connecting through places like Dubai,” Ahmad said.
“While some may view the region as risky, notably carriers from the US that do not serve the GCC (Gulf Cooperation Council), overall, passengers will still fly on as normal. There is no security reason nor any other factor that negatively acts as a deterrent. The Qatar spat is bilateral, so the impact is limited to those who serve Doha and to Qatar Airways,” he added.


First Abu Dhabi Bank completes Bank Audi Egypt takeover

First Abu Dhabi Bank has gained legal and regulatory approval to complete the acquisition of a 100 percent stake in Bank Audi Egypt. (Reuters/File Photo)
First Abu Dhabi Bank has gained legal and regulatory approval to complete the acquisition of a 100 percent stake in Bank Audi Egypt. (Reuters/File Photo)
Updated 22 April 2021

First Abu Dhabi Bank completes Bank Audi Egypt takeover

First Abu Dhabi Bank has gained legal and regulatory approval to complete the acquisition of a 100 percent stake in Bank Audi Egypt. (Reuters/File Photo)
  • Following the transfer of shares, the acquisition will make First Abu Dhabi Bank one of the largest international banks operating in Egypt

CAIRO: First Abu Dhabi Bank has gained legal and regulatory approval to complete the acquisition of a 100 percent stake in Bank Audi Egypt, a subsidiary of the Lebanese Bank Audi Group, the bank announced on Thursday.

In a statement, the bank said that after the completion of the share transfer process, First Abu Dhabi Bank will begin merging the assets and operations of Bank Audi Egypt and First Abu Dhabi Bank — Egypt, with the merger process expected to be completed in 2022.

Following the transfer of shares, the acquisition will make First Abu Dhabi Bank one of the largest international banks operating in Egypt, with assets exceeding EGP 130 billion ($8.5 billion) after consolidating on Dec. 31, 2020.

“This step represents a strategic achievement that supports First Abu Dhabi Bank’s development aspirations at the international level and will accelerate the expansion of its business in one of the most important markets with high growth potential. This acquisition will play an essential role to enhance the volume and momentum of First Abu Dhabi Bank’s business in Egypt,” Hana Al-Rostamani, CEO of First Abu Dhabi Bank Group, said in a statement.

The banking services Bank Audi Egypt provides to individuals and companies through its wide network of branches will support the operations of First Abu Dhabi Bank in Egypt, which has operated in Egypt since 1975.

Mohamed Abbas Fayed has been appointed CEO of the combined entity. He joined First Abu Dhabi Bank in 2019 and was previously CEO and managing director of Bank Audi Egypt, which helped him gain extensive experience over three decades in the sector and in the Egyptian market.


Saudi Arabia sees 110% rise in flight searches in March

Saudi Arabia sees 110% rise in flight searches in March
Updated 22 April 2021

Saudi Arabia sees 110% rise in flight searches in March

Saudi Arabia sees 110% rise in flight searches in March
  • The Skyscanner data showed that domestic flights within Saudi Arabia were the most searched for last month

RIYADH: Saudi Arabia recorded a 110 percent month-on-month surge in people searching for flights in March, according to global online travel platform Skyscanner, as the Kingdom’s travelers get ready for international flights to reopen from May 17.
The Skyscanner data showed that domestic flights within Saudi Arabia were the most searched for last month, followed by international destinations in India, Pakistan, the Philippines and Egypt.
Flights were grounded in the Kingdom in March 2020. Domestic traffic resumed at the end of May 2020 and the Saudi General Authority of Civil Aviation (GACA) recently announced that international flights will resume by May 17, 2021.
In a bit to capitalize on this, Skyscanner has launched an Arabic language version of its platform on desktop and mobile web.
“We’re pleased to be able to offer travelers in the Middle East a far more relevant experience on desktop, allowing them to plan and book travel in their local language and currency,” Gavin Harris, director of strategic partnerships, Skyscanner, said in a press statement.
“Arabic is one of the 5th most spoken languages in the world and outbound travel from Saudi Arabia and the UAE accounts for a significant proportion of the total travel market,” he added.
In December, the “Global Holiday Intent” survey, conducted by YouGov on behalf of Reed Travel Exhibitions — organizer of the Arabian Travel Market (ATM) exhibition in Dubai — found that 46 percent of those surveyed in Saudi Arabia said that they intended to travel internationally once restrictions were lifted.
Additional research released this week by global travel services company Collinson found that more than four fifths of business travelers in Saudi Arabia had seen their job affected in some way by a lack of cross-border business travel, and about one third of survey respondents said that they felt unable to do their job effectively.


Evergrow signs $400m loan to restructure debts

Evergrow signs $400m loan to restructure debts
Updated 22 April 2021

Evergrow signs $400m loan to restructure debts

Evergrow signs $400m loan to restructure debts
  • $74 million of loan will finance construction of fertilizer plant in Sadat City
  • Mashreq Bank and National Bank of Egypt led 12-bank syndicate

RIYADH: Egyptian fertilizer company Evergrow has signed a $400 million loan agreement with a syndicate of 12 banks led by Mashreq Bank and the National Bank of Egypt (NBE), who acted as the facility arrangers, Asharq reported citing a joint statement on Wednesday.

The plan consists of $326 million that will be used to restructure previous debts Evergrow owes to the same banks, while the remaining $74 million will finance the construction of the third phase of the company’s fertilizer plant in Sadat City, slated for completion within nine months.

The financing is one of the largest dollar loans granted by banks to private sector companies in the Egyptian market in the field of potassium fertilizers during the past 10 years.

The deal is part of Evergrow’s financial reform program sponsored by the Central Bank of Egypt.

The new funds will help raise the annual production capacity of all the company’s products from 817,000 tons currently to 1.15 million tons annually, said Evergrow Chairman Mohamed El Kheshen.

Egypt’s Minister of Trade and Industry Neveen Gamea in March said that Egypt aims to increase its exports — especially to EU, African and Arab markets — to $100 billion, through the implementation of a strategic plan.


Turkish crypto founder flees with reported $2bn

Turkish crypto founder flees with reported $2bn
Updated 22 April 2021

Turkish crypto founder flees with reported $2bn

Turkish crypto founder flees with reported $2bn
  • Launched aggressive campaigns to lure investors
  • Founder reported to have flown to either Albania or Thailand
ISTANBUL: Turkish prosecutors on Thursday opened an investigation after the Istanbul-based founder of a cryptocurrency exchange shut down his site and fled the country with a reported $2 billion in investors’ assets.
The Thodex website went dark after posting a mysterious message saying it was suspending trading for five days on Wednesday because of an unspecified outside investment.
Turkish security officials then released a photo of Thodex founder Faruk Fatih Ozer going through passport control at Istanbul airport on his way to an unspecified location.
Local media reports said Ozer — reported to be either 27 or 28 years old — had flown either to Albania or Thailand.
HaberTurk and other media said Thodex shut down after running a promotional campaign that sold Dogecoins at a big rebate — but did not allow investors to sell.
Reports said the website and the entire exchange had shut down while holding at least $2 billion from 391,000 investors.
“The victims are panicked,” investors’ lawyer Oguz Evren Kilic was quoted as saying by HaberTurk.
“They are lodging complaints at prosecutors’ offices in the cities they reside.”
Prosecutors launched an investigation into the businessman on charges of “aggravated fraud and founding a criminal organization,” the private DHA news agency said.
Thodex has launched aggressive campaigns to lure investors.
It had first pledged to distribute luxury cars through a flashy advertising campaign featuring famous Turkish models.
The platform then launched its Dogecoin drive.
The cryptocurrency is getting particularly popular among Turks who are looking to preserve their saving in the middle of a sharp decline in the value of the local lira.
The Turkish crypto market remains unregulated despite growing skepticism from President Recep Tayyip Erdogan’s government about the safety and use of digital currencies.
The Turkish central bank has decided to ban the use of crypto currencies in payments for goods and services starting from April 30.
It warned that cryptos “entail significant risks” because the market is volatile and lacks oversight.
“Wallets can be stolen or used unlawfully without the authorization of their holders,” the central banks warned last week.

Riyadh property prices rise 2% in Q1 even as rents fall

Riyadh property prices rise 2% in Q1 even as rents fall
Updated 22 April 2021

Riyadh property prices rise 2% in Q1 even as rents fall

Riyadh property prices rise 2% in Q1 even as rents fall
  • Mortgages rise, underpinning demand
  • Office sector remains under pandemic pressure

RIYADH: Property prices in the Saudi capital edged higher in the first quarter even as rental rates eased, JLL said.
Riyadh’s residential sale prices registered an annual increase of 2 percent for apartments and villas. By contrast, rental rates reported yearly declines of 1 percent for apartments and villas, it said. Some 7,700 homes were handed over during the period, the broker said.
“Looking ahead, the government initiatives that are pushing Riyadh to be the business hub of the region are expected to spur local and international demand,” JLL said in the report.
It said that strong government support helped to boost demand for residential property in the first three months of the year.
New mortgage loans for individuals jumped by 33,000 contracts in January 2021, it said.
The total value of mortgages increased to SR16.4 billion, according to the Saudi Arabia Monetary Agency (SAMA).
The Riyadh office market remains under pressure with average lease rates across a basket of Grade A & B office spaces in the city falling by 2 percent over the quarter compared to a year earlier.