Abu Dhabi, Wizz Air to launch new low-cost carrier

Abu Dhabi, Wizz Air to launch new low-cost carrier
CEO of Wizz Air Jozsef Varadi at Budapest airport, Hungary. (Reuters)
Short Url
Updated 02 March 2020

Abu Dhabi, Wizz Air to launch new low-cost carrier

Abu Dhabi, Wizz Air to launch new low-cost carrier
  • Abu Dhabi Developmental Holding Company and Budapest-based Wizz Air said they concluded the definitive agreement to set up the new airline
  • The venture will compete with another joint venture between Abu Dhabi’s giant Etihad Airways and Sharjah’s low-cost Air Arabia

ABU DHABI: New low-cost airline Wizz Air Abu Dhabi is to launch operations from the United Arab Emirates capital Abu Dhabi in the second half of 2020, the partners in the venture announced Monday.
State-owned Abu Dhabi Developmental Holding Company and Budapest-based Wizz Air said they “concluded the definitive agreement” to set up the new airline.
“Wizz Air Abu Dhabi plans to start operations in the second half of the year,” they said in a joint statement.
The venture will compete with another joint venture between Abu Dhabi’s giant Etihad Airways and Sharjah’s low-cost Air Arabia, to be launched in the first half of this year.
Like Wizz Air Abu Dhabi, Air Arabia Abu Dhabi will operate from Abu Dhabi International Airport.
Launched in 2003 by oil-rich Abu Dhabi, Etihad has faced stiff competition from Dubai’s Emirates and Qatar Airways, and it posted losses in the past three years.
Airlines in the Arab states of the Gulf have faced a double hit from oil price fluctuations and regional political tensions.


IMF: Vaccine inequity threatens Mideast’s economic recovery

IMF: Vaccine inequity threatens Mideast’s economic recovery
Updated 11 April 2021

IMF: Vaccine inequity threatens Mideast’s economic recovery

IMF: Vaccine inequity threatens Mideast’s economic recovery
  • IMF expects economic growth to reach 4 percent for the Middle East this year
  • Outlook bleaker for developing countries says IMF

DUBAI: Middle East economies are recovering from the coronavirus pandemic faster than anticipated, largely due to the acceleration of mass inoculation campaigns and an increase in oil prices. But the International Monetary Fund warned Sunday that an uneven vaccine distribution would derail the region’s rebound, as the prospects of rich and poor countries diverge.
In its latest report, the IMF again revised upward its 2020 economic outlook for the Mideast and North Africa, now outlining just a 3.4 percent contraction last year, with growth for the region’s oil exporters buoyed by a boom for commodities and rise in oil price, which hit $67 a barrel in March. Even with an expected dip to $57 a barrel by the end of 2021, the surge from last year’s all-time lows is boosting the oil-rich nations of the Gulf, such as the United Arab Emirates and Saudi Arabia, which also have moved swiftly toward widespread vaccination.
But elsewhere in the region, from Yemen and Sudan to Libya and Lebanon, where inflation soars, instability prevails and wars have left lasting scars, the damaging effects of the pandemic will drag on and cause economic harm, the IMF said — possibly for years to come.
“We are a year into the crisis and recovery is back, but it is a divergent recovery,” Jihad Azour, director of the Middle East and Central Asia department at the IMF, told The Associated Press. “We are at turning point. ... Vaccination policy is economic policy.”
The IMF expects economic growth to reach 4 percent for the Middle East this year. But that rosy outlook papers over the region’s deep economic divides.
For oil-rich economies, yawning deficits are expected to halve this year as revenues climb, more arms get jabbed and lockdown measures recede, said Azour. Thanks to strong government management of the virus’ successive waves and the jolt in oil prices, Saudi Arabia’s economy will expand 2.9 percent — compared to last year’s contraction of 4.1 percent. Higher oil prices come as the Organization of the Petroleum Exporting Countries (OPEC) and its allies keep a lid on production and it seems unlikely that the US will quickly lift sanctions on Iran’s critical oil sector.
The IMF expects the UAE’s economy to grow this year by 3.2 percent, with Dubai’s World Expo, now rescheduled for October 2021, key to the nation’s recovery. Dubai hopes the massive event will draw 25 million visitors and a series of deals, heralding a bright post-pandemic future.
The UAE has launched among the world’s fastest inoculation campaigns, with over 90 doses administered per 100 residents as of this week. Still, the collapse of hospitality, tourism and retail presents challenges for Dubai, where a cascade of layoffs hit foreign workers and slashed the emirate’s population by 8.4 percent, according to ratings agency S&P Global.
The outlook is bleaker for fragile and developing economies, many with lagging vaccination campaigns, few resources for fiscal stimulus and revenues drawn heavily from sectors like tourism that have been slowest to recover from the pandemic.
Whereas rich countries plan to vaccinate most of their population in a few months, swaths of the region — from Afghanistan and Gaza to Iraq and Iran — likely won’t inoculate a significant portion of their populations until mid-2022, the IMF said.
Even that estimate may be optimistic. The region’s lowest-income countries could end up waiting until 2023 at the earliest for mass vaccination, according to the report. Meanwhile, many countries’ beleaguered health systems are straining under resurgent waves of infections, prompting authorities to impose new restrictions and inflict more economic pain.
The IMF expects a sluggish 2021 recovery for Egypt and Pakistan, oil importers reliant on tourism that saw an exodus of foreign investors last year. The fund revised down its growth estimate for Jordan, where the youth unemployment rate has skyrocketed to 55 percent. Sudan remains mired in debt and threatened by instability, but its economy could grow for the first time in years as it gains new access to international financial networks.
Lebanon, in the midst of its worst financial crisis ever, remains the only Mideast economy at risk of further contraction. The country has defaulted on its foreign debt and failed to implement economic reforms, let alone form a government. A giant explosion at the Beirut port last year wreaked havoc on the capital. Discussions with the IMF led nowhere after the Cabinet quit.
Azour declined to even offer a specific economic forecast for Lebanon this year, citing “all the uncertainties.”
In Iran, the IMF found reason to praise economic growth after years of decline, noting that the government’s resistance to virus-induced lockdowns that would have devastated its sanctions-hit economy had saved it from the worst of the pandemic’s fallout. The country’s economy is expected to grow 2.5 percent in 2021, Azour said, building on slight gains last year.
But Iran’s recovery remains far off as its vaccinations lag, inflation eliminates people’s savings and economic policies overlook the most vulnerable. The IMF continues to consider Iran’s $5 billion assistance request, which would be its first loan since 1962. Meanwhile, American sanctions remain in force as torturous discussions begin over a return to Tehran’s tattered 2015 nuclear deal with world powers.
“A removal of the recently implemented sanctions will of course allow the Iranian economy to export more, trade more, and this will have a positive impact,” said Azour, while urging the government to tame inflation and better incorporate the private sector.
Despite the worsening inequality, the pandemic has shown the fortunes of the Mideast’s richest and poorest countries to be increasingly intertwined. Surging infections and foundering inoculation anywhere in the region could spread new variants that threaten overall economic and public health, the IMF reported.
“Therefore, any regional cooperation would be welcome going forward,” said Azour.


Qatar National Bank net profit falls 7% as provisions climb

Qatar National Bank net profit falls 7% as provisions climb
Updated 11 April 2021

Qatar National Bank net profit falls 7% as provisions climb

Qatar National Bank net profit falls 7% as provisions climb
  • Total assets grow by 8%
  • Bad loans ration increases

DUBAI: Qatar National Bank (QNB) , the biggest lender in the Gulf, said on Sunday its first quarter net profit fell by 7 percent from a year earlier to 3.3 billion riyals ($906 million) as it booked 1.4 billion riyals in "precautionary" loan loss provisions.
The bank's total assets grew by 8 percent from a year earlier to 1.042 trillion riyals at the end of March, the bank said in a statement. That growth was mainly due to a 2 percent increase in loans advances to 721 billion riyals.
QNB's ratio of non-performing loans rose to 2.2 percent at the end of the quarter from 1.9 percent at the end of March 2020.
It said its loan to deposit ratio of 96.1 percent was "healthy" and complemented by conservative credit underwriting in the first quarter.
"In addition, QNB Group continued its drive for cost rationalization in addition to sustainable revenue generating sources. This helped QNB Group to improve the efficiency (cost to income) ratio to 23.4 percent, which is considered one of the best ratios among the large financial institutions in the MEA region," it said.
The cost to income ratio improved from 25.6 percent in the first quarter of 2020 and 24.3 percent in the fourth quarter.
The loan loss provisions were "a precautionary measure taking into account the long-term view of the financial impacts of the COVID-19 pandemic," said QNB, which according to its website is 50 percent owned by Qatar's sovereign wealth fund, the Qatar Investment Authority.
Provisions rose from 972.8 million riyals in the first quarter of last year.
QNB's capital adequacy ratio was at 19 percent in the first quarter from 18.4 percent a year earlier.


Bahrain’s Arcapita buys FedEx distribution center in Texas

Bahrain’s Arcapita buys FedEx distribution center in Texas
Updated 11 April 2021

Bahrain’s Arcapita buys FedEx distribution center in Texas

Bahrain’s Arcapita buys FedEx distribution center in Texas
  • Martin Tan, CEO of Arcapita, said the latest acquisition was part of the company’s investment in the fast-growing e-commerce sector

DUBAI: Bahrain-based investment firm Arcapita Group Holdings on Sunday announced it had bought a Texan distribution facility used by FedEx, bringing the total value of its US industrial real estate portfolio to over $200 million.

The latest acquisition of the Cedardale Distribution Center in Dallas brings to 16 the number of industrial facilities it has bought in Cleveland, Ohio and Indianapolis, Indiana.

The center was built in 2018 and is located in Dallas-Fort Worth, America’s fourth-largest metropolitan area, with a population of over 7.5 million people. It serves as a vital cog in FedEx’s distribution network in the southern US.

“The logistics sector is a key focus area for Arcapita. We have recently completed several acquisitions in the sector and as part of our broader strategy, we are focused on acquiring highly functional properties leased to investment grade tenants on a 10-15-year basis. We look forward to working with our partners to acquire additional assets in the months to come,” Brian Hebb, head of US Real Estate at Arcapita, said in a press statement.

Martin Tan, CEO of Arcapita, said the latest acquisition was part of the company’s investment in the fast-growing e-commerce sector and the necessary supply chain to service it. Arcapita has offices in Atlanta, London and Singapore and an affiliated office in Bahrain. Over the last 24 years, it has recorded over 90 investments with a total transaction value in excess of $30 billion.


Egypt’s hotels had up to 45% occupancy rate in Q1 2021

Egypt’s hotels had up to 45% occupancy rate in Q1 2021
Updated 11 April 2021

Egypt’s hotels had up to 45% occupancy rate in Q1 2021

Egypt’s hotels had up to 45% occupancy rate in Q1 2021
  • Tourism accounts for up to 15 percent of Egypt’s national output, and is a key source of foreign currency
  • The industry revenues plunged 70 percent in 2020 due to the coronavirus pandemic

CAIRO: The occupancy rate of Egypt’s hotels, which are running at half capacity due to COVID-19 regulations, was between 40 percent and 45 percent in the first quarter, an official from the tourism ministry told Reuters on Sunday.
This amounts to an occupancy rate of nearly 25 percent if hotels were running at full capacity, according to Reuters calculations.
Tourism accounts for up to 15 percent of Egypt’s national output, and is a key source of foreign currency. The industry revenues plunged 70 percent in 2020 due to the coronavirus pandemic, with numbers of visitors sinking to 3.5 million from 13.1 million in 2019.
Egypt received 500,000 tourists in the first three months of 2021 and earned tourism revenues of between $600 million and $800 million, deputy tourism minister Ghada Shalabi said earlier this month.
The country shut hotels in March 2020 as part of measures to contain the spread of COVID-19, but reopened them a few months later with a reduced capacity. Hotels currently have capacity capped at 50 percent in line with health regulations.
The hotel occupancy rate was 25 percent in January, then increased to 30 percent in February, before jumping to 45 percent in March, the tourism official told Reuters on condition of anonymity.
Egypt’s Red Sea province saw the highest hotel occupancy in Q1, followed Sharm El-Sheikh in the Southern Sinai province, the official added.


Saudi builder Binladin appoints turnaround specialists to senior team

Saudi builder Binladin appoints turnaround specialists to senior team
Updated 11 April 2021

Saudi builder Binladin appoints turnaround specialists to senior team

Saudi builder Binladin appoints turnaround specialists to senior team
  • The regional construction sector has been hit hard by the weakening of oil prices since 2014

RIYADH: Binladin International Holding Group (BIHG), the parent company of Saudi Arabia’s biggest builder, has hired two senior executives with a background in corporate turnarounds.
Balaji Prasad has been named group chief financial officer and Roberto Liuzza has been hired as group chief organization excellence officer.
Prasad has a background in debt restructuring, corporate turnaround, business transformation and complex fundraising. He was previously CFO of Abu Dhabi-listed developer Manazel.
Liuzza has also worked on a number of complex turnarounds across various industries, the company said in a statement on Sunday.
The regional construction sector has been hit hard by the weakening of oil prices since 2014 and the associated decline in the real estate sector which has plunged some of the industry’s biggest names into financial distress.
BIHG made a number of other senior appointments over the last year, including Ahmed Al-Sanie as group managing director; Abdulrahman Bajunaid as CEO of real estate; and Samer Khawashki as CEO of investments over the past year.
Established in March 2019, BIHG oversees and manages the affairs of units across its portfolio, including SBG – Saudi Arabia’s largest construction company and one of the world’s largest contractors.