Inflation Inflation! EK what to expect?
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LONDON, England (CNN) -- The Gulf may still be booming but inflation - and skyrocketing prices - is making life tough for the workforce.
Working in the Gulf is less profitable for expatriate workers because of inflation
Many expats initially drawn by the region's tax-free salaries and high standard of living are now feeling the effects of inflation in high rent and living costs. All this is making work in Dubai, Qatar and the surrounding countries a less attractive proposition than it was a few years ago.
"The working population here is growing restless and the reasons are obvious," said David Westley, Editorial Director at ArabianBusiness.com. "Inflation has become a real issue across the region... salaries have risen but they haven't risen as fast as inflation, which in real terms means you've had a pay cut," he continued.
This means workers are finding it harder to save money and are experiencing a decrease in their standard of living. Add to that a lack of key social infrastructure like schools and some of the major incentives for people to stay in the region are disappearing.
ArabianBusiness.com recently conducted an online survey which found that more than two thirds of workers who responded were more inclined to look for another job this year than in 2007.
Off the record, even EK recruiters admit there is a serious problem. Lots of job browsers, but many rejecting the final offer. A few are foolish enough to fall for the hype and distorted facts they get told on interview but the more savvy see the potential pitfalls and real problems and steer clear.
Working in the Gulf is less profitable for expatriate workers because of inflation
Many expats initially drawn by the region's tax-free salaries and high standard of living are now feeling the effects of inflation in high rent and living costs. All this is making work in Dubai, Qatar and the surrounding countries a less attractive proposition than it was a few years ago.
"The working population here is growing restless and the reasons are obvious," said David Westley, Editorial Director at ArabianBusiness.com. "Inflation has become a real issue across the region... salaries have risen but they haven't risen as fast as inflation, which in real terms means you've had a pay cut," he continued.
This means workers are finding it harder to save money and are experiencing a decrease in their standard of living. Add to that a lack of key social infrastructure like schools and some of the major incentives for people to stay in the region are disappearing.
ArabianBusiness.com recently conducted an online survey which found that more than two thirds of workers who responded were more inclined to look for another job this year than in 2007.
Off the record, even EK recruiters admit there is a serious problem. Lots of job browsers, but many rejecting the final offer. A few are foolish enough to fall for the hype and distorted facts they get told on interview but the more savvy see the potential pitfalls and real problems and steer clear.
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The USD is now within a hair of 1.60 on the EUR. I remember when the "Pro's" boldlly claimed that the Europeans would take action when it was at 1.50.
The point is the USD is doomed to fall a lot more. The country would be bankrupt if it was a company and no-one wants to do business with a company that looks wobbly.
The effect for us in the UAE is to expect even more rampant inflation unless some sort of revaluation or de-peg of the Dirham takes place.
Not likely however in the immediate future for a number of reasons, not least political. The Americans need a low dollar. The Fed are actively seeking this, though trying to control the fall to avoid panic and a large overshoot of where they need it. Here in the UAE, we go down with it and are indirectly now paying for American excesses. That's right, by virtue of the devaluation of our salaries we are paying the bills for America, and shackled to this by the Dirham peg.
I resent working for those who elected a monkey for a president and paying for his illegal and ill-considered war. But those are my views so I'll move on.
Oil now at 115 means aviation is going to suffer badly. Its not likely to recover with further dollar decline. US carriers are collapsing and more will fall. Inflation in the US is, and will get even more, serious. Aviation is the first luxury to economise on. High oil prices and lower passenger loads. No-one needs to think to hard too figure out where all this is heading.
Back in the UAE we can expect minimal salary increases, rampant inflation and longer hours as the company milks this situation for all its worth. We have been warned.....
The point is the USD is doomed to fall a lot more. The country would be bankrupt if it was a company and no-one wants to do business with a company that looks wobbly.
The effect for us in the UAE is to expect even more rampant inflation unless some sort of revaluation or de-peg of the Dirham takes place.
Not likely however in the immediate future for a number of reasons, not least political. The Americans need a low dollar. The Fed are actively seeking this, though trying to control the fall to avoid panic and a large overshoot of where they need it. Here in the UAE, we go down with it and are indirectly now paying for American excesses. That's right, by virtue of the devaluation of our salaries we are paying the bills for America, and shackled to this by the Dirham peg.
I resent working for those who elected a monkey for a president and paying for his illegal and ill-considered war. But those are my views so I'll move on.
Oil now at 115 means aviation is going to suffer badly. Its not likely to recover with further dollar decline. US carriers are collapsing and more will fall. Inflation in the US is, and will get even more, serious. Aviation is the first luxury to economise on. High oil prices and lower passenger loads. No-one needs to think to hard too figure out where all this is heading.
Back in the UAE we can expect minimal salary increases, rampant inflation and longer hours as the company milks this situation for all its worth. We have been warned.....
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Won't get better
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Who are the pilots that are actually stupid enough to come to this inflationary environment? Are they that desperate? Can they not extend the numbers and trends to a position 2 years ahead?
I guess they are as stupid as someone who would criticize them and he himself is still here in this inflationary enviornment. It's called airline job stabilization, compared with other parts of the world.
I guess they are as stupid as someone who would criticize them and he himself is still here in this inflationary enviornment. It's called airline job stabilization, compared with other parts of the world.
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Schismatic,
I completely understand your situation. But do you believe that the guys joining now live in a complete bubble of ignorance? Do you honestly believe that they have left stable companies and countries to come here? They have come from failed carriers, no opportunities other than RJ captain, much greater deterioration of T&Cs than what we have experienced, worse political enviornment perhaps, lost retirements and pensions, etc.
All have valid reasons for coming here and most probably would not if there were better alternatives, FOR THEM. They might not have the wide body jet time or whatever, like you. So for them, they may be doing exactly what you are, coming in, get the command and a few hours and then look for a better opportunity. The days of "womb to tomb" airline jobs are all but over, except for maybe UPS, FedEx, BA, Air France and a few others. But 10-15 years to any command at those places.
I guess what I'm saying is, you are denigrating your future copilots by implying that they are stupid for doing what you are still doing. Five more years or less for you-five years or less for them: what's the difference? It's no harder for you to "untangle" here than it is for them to leave their country, enviornment, comfort zone, and move family and belongs here.
You know, they already may have their exit plan and are wondering about your intelligence for staying as long as you have with all the wide body command time you have and with all of the other opportunities in the world vying for your experience.
And to add one more comment on why pilots are still wanting to apply/work here. If you don't think the below doesn't scare the bejeezus out of them.......everywhere!
Delta reports $6.4 BILLION loss for 1st qtr.
Delta reports $6.4B loss in first quarter
Wednesday April 23, 7:35 am ET
Delta says it lost $6.4 billion in first quarter on hefty fuel costs, market value decline ATLANTA (AP) -- Delta Air Lines, the nation's third-largest carrier, says its loss widened in the first quarter to a whopping $6.39 billion due to soaring fuel prices and the steep decline in the company's market value.The results badly missed Wall Street expectations, despite a 12 percent increase in sales.
NWA reports $4.1 Billion loss for 1st qtr.
CHICAGO (Reuters) - Northwest Airlines Corp (NWA.N: Quote, Profile, Research), which plans to merge with Delta Air Lines Inc (DAL.N: Quote, Profile, Research), on Wednesday reported a quarterly net loss as the carrier grappled with skyrocketing fuel prices.
The No. 5 U.S. airline said it lost $4.1 billion, or $15.78 per share, in the first quarter, compared with a loss of $292 million a year earlier, while the company was restructuring in bankruptcy and before its new shares were issued.
The results include a $3.9 billion non-cash goodwill impairment charge
I completely understand your situation. But do you believe that the guys joining now live in a complete bubble of ignorance? Do you honestly believe that they have left stable companies and countries to come here? They have come from failed carriers, no opportunities other than RJ captain, much greater deterioration of T&Cs than what we have experienced, worse political enviornment perhaps, lost retirements and pensions, etc.
All have valid reasons for coming here and most probably would not if there were better alternatives, FOR THEM. They might not have the wide body jet time or whatever, like you. So for them, they may be doing exactly what you are, coming in, get the command and a few hours and then look for a better opportunity. The days of "womb to tomb" airline jobs are all but over, except for maybe UPS, FedEx, BA, Air France and a few others. But 10-15 years to any command at those places.
I guess what I'm saying is, you are denigrating your future copilots by implying that they are stupid for doing what you are still doing. Five more years or less for you-five years or less for them: what's the difference? It's no harder for you to "untangle" here than it is for them to leave their country, enviornment, comfort zone, and move family and belongs here.
You know, they already may have their exit plan and are wondering about your intelligence for staying as long as you have with all the wide body command time you have and with all of the other opportunities in the world vying for your experience.
And to add one more comment on why pilots are still wanting to apply/work here. If you don't think the below doesn't scare the bejeezus out of them.......everywhere!
Delta reports $6.4 BILLION loss for 1st qtr.
Delta reports $6.4B loss in first quarter
Wednesday April 23, 7:35 am ET
Delta says it lost $6.4 billion in first quarter on hefty fuel costs, market value decline ATLANTA (AP) -- Delta Air Lines, the nation's third-largest carrier, says its loss widened in the first quarter to a whopping $6.39 billion due to soaring fuel prices and the steep decline in the company's market value.The results badly missed Wall Street expectations, despite a 12 percent increase in sales.
NWA reports $4.1 Billion loss for 1st qtr.
CHICAGO (Reuters) - Northwest Airlines Corp (NWA.N: Quote, Profile, Research), which plans to merge with Delta Air Lines Inc (DAL.N: Quote, Profile, Research), on Wednesday reported a quarterly net loss as the carrier grappled with skyrocketing fuel prices.
The No. 5 U.S. airline said it lost $4.1 billion, or $15.78 per share, in the first quarter, compared with a loss of $292 million a year earlier, while the company was restructuring in bankruptcy and before its new shares were issued.
The results include a $3.9 billion non-cash goodwill impairment charge
Last edited by TangoUniform; 23rd Apr 2008 at 13:31.
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Just don't be fooled, it's far from going away...
Al-Mansouri said last month it would be a "miracle" if the UAE meets its 5% inflation target this year.
A little off target. Remember that not much is transparent around here. The last figures are 11.8% inflation.
UAE inflation rose to at least a 20-year peak of 11.4 per cent last year and will rise slightly to 11.8 per cent this year, the poll showed
But as discussed earlier it is more like 20% +++.
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The dollar will continue to fall. America is deliberately doing this to make others pay the bill for their irrational lending, greed and overspending. Hardly surprising it has lost world respect. Its leadership is corrupt and morally bankrupt. Their mantra of democracy is wearing a bit thin as they hardly walk the walk.
UAE will continue the peg. Who cares about inflation - it keeps their property bubble growing and lowers ex-pat employment costs. Also keeps them in the good books with Mr. Bush. If they dumped the dollar peg, he would go down as the second president in power when the american currency collapsed entirely.
Inflation will be officially 20% by the end of 2008. The dollar will not recover for a few years yet. America has not completed its cycle of systematic devaluation.
UAE will continue the peg. Who cares about inflation - it keeps their property bubble growing and lowers ex-pat employment costs. Also keeps them in the good books with Mr. Bush. If they dumped the dollar peg, he would go down as the second president in power when the american currency collapsed entirely.
Inflation will be officially 20% by the end of 2008. The dollar will not recover for a few years yet. America has not completed its cycle of systematic devaluation.
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A long article but very interesting. UAE will of course follow suit as they will not give up the dollar peg.
Joining EK? - Spend 10 minutes on reading this:
http://www.shadowstats.com/article/292
Joining EK? - Spend 10 minutes on reading this:
http://www.shadowstats.com/article/292
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Will next year bonus cover inflation?
Today we get the bonus for last year's work. It will compensate last year's inflation. But what about this year?
http://www.arabianbusiness.com/51999...hroughout-gulf
Very interesting times ahead of us.
Keep Discovering
http://www.arabianbusiness.com/51999...hroughout-gulf
Very interesting times ahead of us.
Keep Discovering
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I don't think EK pilots have any idea of what is coming over the next 12 months in relation to cost increases.
Even as we get the salary increase of a pathetic 12%, there has been over 15% cost increases during the preceding 12 months. In some areas its a lot more.
We are down 3% since the last pay review even with the latest increase.
The alarming thing is that over the next 12 months inflation will be over 20% even at the most conservative economist estimates. One only has to look at the oil price to see why. Even if oil subsequently drops, the new prices will be set and will not roll back. Traders will try to recover for losses incurred during the high prices.
EK is looking forward to an actual salary reduction in the order of 20% over the next year.
Even as we get the salary increase of a pathetic 12%, there has been over 15% cost increases during the preceding 12 months. In some areas its a lot more.
We are down 3% since the last pay review even with the latest increase.
The alarming thing is that over the next 12 months inflation will be over 20% even at the most conservative economist estimates. One only has to look at the oil price to see why. Even if oil subsequently drops, the new prices will be set and will not roll back. Traders will try to recover for losses incurred during the high prices.
EK is looking forward to an actual salary reduction in the order of 20% over the next year.
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Money Week in the UK now puts Dubai inflation at 20%
Why America's debt makes it a dangerous place - Money Week
The same article doesn't place much faith in the USD or the Dirham if it remains pegged at current rates.
More inflation to come.
Why America's debt makes it a dangerous place - Money Week
The same article doesn't place much faith in the USD or the Dirham if it remains pegged at current rates.
More inflation to come.
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REMEMBER and don't be fooled
Dubai has become a really expensive place. Keep posting important info about the cost of living around here. This thread has to be kept updated as much as possible. Prices just do not stop to go upward. Already the pay raise has been wiped out by the 20% +++ inflation
Flying the flag for a new Dubai
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Officially, inflation is 11% but locals say the real figure is almost double that. When it comes to rent and property prices, they say, the rate exceeds 30%
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You cant really say that without mentioning where you are comparing it with.
Compared to Europe Dubai isn't expensive, most things are cheaper, but compared to the US then it probably is a bit more expensive.
It's all relative
Compared to Europe Dubai isn't expensive, most things are cheaper, but compared to the US then it probably is a bit more expensive.
It's all relative
Last edited by Jet II; 28th Aug 2008 at 09:49.
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Relative of course but..
Well of course everything is relative. But do you agree that if you get 12% pay raise and you have 20% inflation... well relative or not you loose buying power. Relatively it becomes more expensive. If you live in Europe or US, you probably own a house that is probably 3 to 4 times your yearly salary. Here in Dubai you are looking at paying 5-7 times your yearly salary at an interest rate of 7 to 8 % for a house. When basic needs like housing and food are going upward so fast, all I can say is that the place is getting expensive. I can't wait to see where a " FlyDubai " Captain with 2 kids will get for housing around here with the 16K DHS a month. Not a House for sure, just an apartment. For me that's expensive. And that's my point.
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No brainer:
The poor EK guys are already stuck here, so why pay them adequately. The FD newbees still have to be lured in, so give them a carrot that seems fresh from far - but is basically rotten from the start .....
Housing is what will be the main motive to leave earlier than anticipated and will therefore cost the dishdashs more in the long run.
The poor EK guys are already stuck here, so why pay them adequately. The FD newbees still have to be lured in, so give them a carrot that seems fresh from far - but is basically rotten from the start .....
Housing is what will be the main motive to leave earlier than anticipated and will therefore cost the dishdashs more in the long run.
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If you live in Europe or US, you probably own a house that is probably 3 to 4 times your yearly salary. Here in Dubai you are looking at paying 5-7 times your yearly salary at an interest rate of 7 to 8 % for a house. When basic needs like housing and food are going upward so fast, all I can say is that the place is getting expensive.
I can't wait to see where a " FlyDubai " Captain with 2 kids will get for housing around here with the 16K DHS a month. Not a House for sure, just an apartment. For me that's expensive. And that's my point.
I can't wait to see where a " FlyDubai " Captain with 2 kids will get for housing around here with the 16K DHS a month. Not a House for sure, just an apartment. For me that's expensive. And that's my point.
Compared with the UK where your housing costs come out of whatever is left after tax of your total income. So surely you have to compare property prices in DXB with your total income - if you do that then DXB doesn't look so bad.
Of course DXB is getting more expensive, but then so are many other cities throughout the world. If you find one where they pay megabucks and the cost of living is peanuts then let me know - I'll race you there
I reckon most pilots own a house 4 to 10 times their annual salary in the UK, depending on how hard they've tried to trade up.(4 times if aged less than 40 or up to 10 times if older than 50)