Abu Dhabi airport sees slower passenger growth in 2017

In this file photo, an Etihad Airways plane prepares to land at the Abu Dhabi airport in the United Arab Emirates. (AP)
Updated 03 July 2017

Abu Dhabi airport sees slower passenger growth in 2017

DUBAI: Etihad Airways’ hub Abu Dhabi International Airport expects a slowdown in the pace of passenger growth this year, the acting chief executive of operator Abu Dhabi Airports said on Monday.
The UAE’s second-busiest commercial airport expects to handle “around 25 million” passengers in 2017 compared with 24.5 million in the previous year, Abdul Majeed Al-Khoori told Reuters by phone.
That would represent a growth of around 2 percent compared with 5.1 percent in 2016.
“This has been a tough year for aviation globally but for the region as well,” an Abu Dhabi Airports spokeswoman said. “We have seen some slowdown in the growth of the airlines that use Abu Dhabi Airport, we also have the regional political situation, these factors are all playing into the slightly slower growth.”
The pace of growth at rapidly expanding Middle Eastern airlines has slowed this year against a more challenging economic backdrop. Travel restrictions imposed by US President Donald Trump’s administration and political crisis in the Gulf have added to the pressure.
Etihad Airways, the main carrier at Abu Dhabi International Airport, is pursuing a strategy review and recruiting for a new group chief executive to succeed veteran boss James Hogan who left the airline on July 1.
On Sunday, the US lifted restrictions on laptops for flights from Abu Dhabi. However, flights between Abu Dhabi and Doha have been suspended since last month after the UAE and three other Arab countries cut diplomatic and economic ties with Qatar.
The Abu Dhabi airport handled 10.1 million passengers in the five months to May 31, an increase of 1.8 percent compared with the same period a year ago
The UAE’s busiest airport is Emirates hub Dubai International Airport, which is also the world’s busiest for international travelers.
Dubai International handled 36.97 million passengers in the first five months of 2017, a 6.7 percent increase on the same period last year.

Blame game as wheels come off India’s auto sector

Updated 5 min 25 sec ago

Blame game as wheels come off India’s auto sector

NEW DELHI: When India’s Finance Minister Nirmala Sitharaman claimed that a preference by millennials for ride-hailing apps was contributing to a painful slump in car sales, it sparked an online backlash from furious youngsters.

They started a campaign using ironic hashtags such as #BoycottMillennials and #SayItLikeNirmalaTai last week to push back against older generations blaming them for today’s problems in society.

While data shows firms such as Uber and Ola are popular with younger consumers more comfortable with shared mobility and digital trends, analysts say the auto industry’s problems run deeper than that — and it is facing more serious bumps in the road.

With a population of 1.3 billion people, India is the world’s fourth-largest car market and one where owning a vehicle is as much a status symbol as a means of transport.

But the country’s once-booming auto sector — seen as an important barometer of overall economic health — is in the slow lane, with sales slumping for the 10th-straight month in August.

“The minimum (priced) car that you can get nowadays starts from six to seven lakhs ($8,500 — $9,800),” university student Somya Saluja told AFP.

“So it’s much easier to pool-in rather than to buy a new car.”

Even India’s richest banker, Uday Kotak, recently said that his son was more comfortable using ride-sharing apps than owning a car.

Uber and Ola reportedly facilitate some 3.65 million daily rides.

Still, Avanteum Advisers managing partner VG Ramakrishnan told AFP the key reason for the drop in car purchases was economic.

“I think the slowdown is primarily because consumer confidence is low and income growth has really been impacted in the last couple of years,” he told AFP.

India’s economic growth slowed for the fifth-straight quarter in April-June to reach its weakest pace in five years.

Banks are also more reluctant to lend owing to a liquidity crunch caused by the near-collapse a year ago of IL&FS, one of India’s biggest shadow banks — finance houses responsible for significant consumer lending.

There are also extra production costs caused by new rules requiring cars to be compliant with emissions and safety standards, while a 28 percent goods and services tax (GST) introduced in 2017 has dampened demand, analysts said.

“Cars are increasingly becoming unaffordable now because of so many taxes,” Karvy Stock Broking auto analyst Mahesh Bendre told AFP.

“To put things in perspective, if you buy a car in India, at least 40-45 percent of costs go to the government in terms of taxes and registration charges and so on.”

A year ago, India displaced Germany to become the world’s fourth biggest car market, having clocked up annual sales growth above seven percent for several years.

But the promising growth ride is screeching to a halt, with passenger car sales tumbling this year, including a 41 percent drop last month — the worst since records began more than 20 years ago.

Aside from passenger cars, sales of commercial vehicles, motorcycles and scooters have also been hammered.

With the industry — a major employer in India — contributing more than seven percent to total GDP and almost half of manufacturing GDP, the potential fallout from an extended slowdown is sending shockwaves through the economy.

Manufacturers are reducing production and cutting jobs, which is also affecting related industries such as auto component manufacturing and at dealerships, totaling about seven percent of India’s total workforce, Bendre said.