Etihad and Emirates keen to spread wings MATT O'SULLIVAN November 27, 2009 THE Middle Eastern airlines Etihad and Emirates are lobbying the Federal Government to increase their quota of flights to Australia, in a further challenge to the dominance of Qantas and Singapore Airlines on the kangaroo route.
Etihad's chief executive, James Hogan, met the federal Transport Minister, Anthony Albanese, and other ministers in Canberra this week to make the airline's case for more flights between the Middle East and Australia. The lobbying comes before talks over bilateral air rights between the Australian and United Arab Emirates governments in February.
Mr Hogan said yesterday that the Abu Dhabi airline would take delivery of a further 100 aircraft over the next eight years, including long-haul Boeing 777s and 787 Dreamliners, and it wanted to ensure it could increase flights should the need arise.
''We are positioning our interests [before] the governments go into bilateral discussions in the new year, and we will see what comes from that,'' he said. ''It's really just planning access so we have the flexibility to move capacity.''
Etihad is using 21 of the 28 slots a week it had previously been allocated. It wants to increase weekly flights to Sydney from 11 to a minimum of 14, services to Melbourne from seven to 14, and those to Brisbane from three to seven. It also plans to begin services to Perth.
Over the past year the Middle Eastern airlines have either maintained or increased their capacity to Australia, while Qantas and Singapore Airlines have been shedding flights due to the downturn in travel.
Qatar Airways also begins flights from Melbourne on December 6, and will start daily flights from Sydney early next year in another attack on Qantas's dominance.
Qantas recently said that the three Middle Eastern airlines would operate almost 50 per cent of first- and business-class seats on the route by 2012. It emphasised that the airlines had been ''going against this global trend'' of cutting flights in the midst of a severe downturn.
An Emirates spokesman, Andrew Parker, confirmed the airline was seeking a ''reasonable'' increase in the number of flights to Australia from its cap of 84 a week by 2011. Over the past 13 years Emirates has increased services to Australia from three a week to 70.
''Australia continues to be an important market for us, and we do want to grow it. In a couple of years we will be at our cap.''
Echoing sentiment from other airlines, Mr Hogan said yields across Etihad's network had fallen between 20 and 25 per cent over the past year, but he was confident demand had bottomed out and the early signs of a recovery had been encouraging.
A spokesman for Mr Albanese said the Government was ''keen to do what was in the national interest when it comes to negotiating international services agreements''.
However, the headline article in the SMH Business shows thing aren't exactly rosy in the sandpit:
Quote:
World markets roiled by Dubai debts European stocks fell the most in seven months and bonds jumped as Dubai's attempt to reschedule its debt rattled investors seeking higher returns in emerging markets. The US dollar slid to a 14-year low against the yen.
London slides
Britain's top shares ended at a three-week closing low, pressured by hefty falls in the banking sector as concerns over Dubai's ability to pay its debts took a toll on confidence.
The FTSE 100 ended 3.2 per cent lower, or down 170.68 points, at 5,194.13 - its lowest close since November 6. Losses on the day represented the biggest percentage drop in eight months. The index is still up 50 per cent since a low in March.
Germany's DAX index ended at 5614.17 points, down 188.85 or 3.25 per cent, while in Paris, the CAC-40 index closed at 3679.23 points, down 129.93 or 3.41 per cent.
Credit-default swaps tied to debt sold by Dubai rose as much as 131 basis points to 571 according to CMA DataVision.
Dubai debt
Dubai World, the government investment company burdened by $US59 billion of liabilities, roiled markets around the world yesterday by seeking to delay repayment on much of its debt.
The US dollar's slump prompted Finance Minister Hirohisa Fujii to say Japan's government is watching currencies ''very closely,'' while traders said the Swiss central bank sold the franc after it climbed to the highest value against the euro since June.
''Dubai isn't doing risk appetite any favors at all and the markets remain in a vulnerable state of mind,'' said Russell Jones, head of fixed-income and currency research in London at RBC Capital Markets. ''We're still in an environment where we're vulnerable to financial shocks of any sort and this is one of those.''
Sovereign debt
The Dubai announcement drove up the cost of protecting emerging-market sovereign debt against default. Contracts linked to Saudi Arabia climbed 18 to 108, while Bahrain rose 30.5 to 225, CMA prices show. Debt swaps linked to Abu Dhabi government bonds increased 18.5 to 155, Vietnam rose 39 to 252, Indonesia climbed 27 to 229 and Russia added 13 to 205.
Dubai, which borrowed $US80 billion in a four-year construction boom to transform its economy into a regional tourism and financial hub, suffered the world's steepest property slump in the global recession. Home prices fell 50 per cent from their 2008 peak, according to Deutsche Bank AG. Banks around the world have written off more than $US1.7 trillion as the credit crisis trashed the value of their assets.....
but methinks Emirates (Dubai) may face a slow decline.
Some talk I have seen that Dubai may have to sell Emirates to Abu Dhabi as part of a 'financial assistance' package - but then that leaves open the question as why you would have two massive airport hubs separated by no more than 80km.
they have more than the rest of the world Black Liquid and money and to proove a point they will spend it WHY NOT ! and buy all the new toys A380 personal jet? they have the first one B747 wasnt big enough
Fears that Dubai may default on billions of dollars of loans have hit the Australian share market hard today, with shares losing nearly 3 per cent in value. Dubai is seeking to delay the repayment of billions of dollars in debt held by the partly government-run company Dubai World. Dubai World is a conglomerate which owns one of the United Arab Emirates' biggest property developers. The company is thought to have debts worth about $US60 billion and wants a six-month suspension on the repayments until May next year. The division director of Macquarie Private Wealth, Martin Lakos, says doubts about Dubai's ability to pay its debts have come out of the blue, despite overbuilding in the economy in the past few years. The All Ordinaries Index has tumbled 2.6 per cent, with the financial sector experiencing the biggest falls. All of the major banks have shed more than 3 per cent. Construction company Leighton Holdings, which has links to Dubai, is down 3.4 per cent to $34.99. The Australian dollar has fallen and is buying 90.6 US cents. UK banks which have exposures as lenders were sold off heavily last night, but Mr Lakos says the exposures should be small for Australian banks.
"The exposures are relatively small given the total size of their commercial lending books."
Dubai actually doesn’t have much oil at all. Other parts of the Emirates do like Abu Dhabi but it would appear they may be becoming increasingly resistant to helping Dubai be bailed out of its past credit driven spending spree.
Why is Dubai actually there? every major city in the world is where is is for a reason. they have a history that led to their development into a metropolis.
Dubai it seams to me , is there only because they can, and have the cash to build it, well, did have the cash..
i understand that it was a fishing/trading port, but wasnt it just that only 20 to 50 yrs ago? hasnt this massive development only come about very recently? whereas other world cities were major cities over a century ago, some millennia old?
It's there and as big as it is because it is ideally placed between Europe and Asia so it has become a business centre in much the same way as Hong Kong. Add to that the incentives given to business (free zones with little or no corporate tax) and that is why it is as big as it is. It is also very popular with the Eurpoeans getting away from their winter, and coming out to 25 degrees sunshine and flash hotels and resorts.
Dubai is in a bad way but there are a large number of very big global companies with a huge stake in Dubai Inc. and as such I would be very surprised if it was let go under. 5 years time and it will be back to fantasy land for Dubai building the tallest and the glitziest of everything, but there will be some continued pain in the meantime.
Beg to differ Ernest. There are many global companies out there that like to operate in an environment where there is little or no regulatory oversight to their operations, they don't have to stick to internationally accepted standards of pay or conditions, can fire anyone whenever they want without recourse or reason.
Not saying it is right, but there are definately a lot of companies out there who enjoy taking advantage of those "liberties".
Dubai it seams to me , is there only because they can, and have the cash to build it, well, did have the cash..
It seems to me that there was a little city in the Nevada Desert,USA that had the same rise to fame, you could argue the same point but it seems to be doing well enough.
ANSA I'd argue the lack of oversight and legislation is what has effectively put Dubai in the crapper and will continue to do so till they get the standard tenets of a western style system. Nice things like equality before the law and real legislative power and laws.
Is this thread where more than enough uninformed individuals gather than you can poke a stick at? And then there was Teresa with:
Quote:
Those who fled to the sandpit, for what ever reason, would do well to start writing nice letters back to their former employer.
Wouldn't you just love it motha T?Watching your ex colleagues begging for their jobs and joining bellow you on the fictitious seniority line. Keep feeding the tall poppy in you.
Last edited by abc1 : 30th November 2009 at 14:33.
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