Dubai Bankrupt?!?!
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More importantly...
....could you sketch out the difference between being number two or number two thousand on the Emirates list?
I have had the luxury of observing that gradient for some time from a position of average perspicacity but I don't see any difference at all.
Stand at ease.
I have had the luxury of observing that gradient for some time from a position of average perspicacity but I don't see any difference at all.
Stand at ease.
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could you sketch out the difference between being number two or number two thousand on the Emirates list?
Seriously, who thinks Dubai has much of a chance of survival beyond it's ability to over-promote itself anyway?! It isn't a city, just a collection of (partly -finished, poorly constructed, completely lacking in taste) buildings.
I would fully expect AUH to quietly scoop up the best parts.
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but the real question will be about crew integration
In my opinion, a far more 'real' question will be the integration of senior and middle management - and of course, the poor sods who do the hard yards for next to nothing in the far less glamorous jobs in both airlines.
I suspect that quite a few of them will not be needed, whereas people lke us (aircrew) will be excess to requirements only if they reduce the overall number of aeroplanes (sorry, 'airplanes' for our American cousins) in the combined fleet. I hasten to add that if the world economic situation continues on its present course, such a reduction is quite on the cards!
Let's all hope the AUH owners are willing to continue to operate at a loss in the short term so they'll have an up and running airline with excess capacity ready to exploit a burgeoning economic situation if and when one ever eventuates from the monetary bloodbath we're witnessing at the moment.
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DXB
I read somewhere recently that petroleum represents only 10% of DXB GDP. If this is true then the reduction in oil price may not affect them as much as let's say Iran/Saudi/Kuwait.
I'm not sure what % of it is for AUH however, as they have the bigger share of oil it might be more of an issue for them.
With all this talk of the 2 carriers merging, how does that fare for the latest one, FlyDubai?
I'm not sure what % of it is for AUH however, as they have the bigger share of oil it might be more of an issue for them.
With all this talk of the 2 carriers merging, how does that fare for the latest one, FlyDubai?
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What complete and utter tripe!!
Even if there were a microscopic element of truth to this rumour, there are probably only around 5 people in this entire world that are privvy to this information. Now (and I'd put the rest of my career earnings on this), I am certain none of you doom merchants are one of these people??
If I am wrong, then I sincerely appologise 'your highness' and welcome to Pprune!
Even if there were a microscopic element of truth to this rumour, there are probably only around 5 people in this entire world that are privvy to this information. Now (and I'd put the rest of my career earnings on this), I am certain none of you doom merchants are one of these people??
If I am wrong, then I sincerely appologise 'your highness' and welcome to Pprune!
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Step 1: Take medication, breathe deeply...that's it...
Step 2: Review title of forum again, focussing carefully on the fourth word in the title....
Oh, you mean this isn't the Gulf News?!?
Step 2: Review title of forum again, focussing carefully on the fourth word in the title....
Oh, you mean this isn't the Gulf News?!?
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Assuming AUH is actually financing EK and buying 40 or 50% of it, as a matter of respect of Arab solidarity, changes won't surface quickly to avoid DXB losing face. The changes will happen quietly, slowly and anarckily(?). It won't be easy to merge given the egos many of the top guys have in both camps.
Who will be the best Chairman, the best CEO, and the best VPs for the different areas? Who will prevail despite the muscling from AUH? How long will the whole thing take?
AUH and DXB will have the interest of flying the Emirates flag on the acft tails across the world as EK does at the moment, but other cosmetic changes will have to happen. Will JXB be a compromise as the HQ? Will the EY fuselage painting match the EK tail? Maybe!
Emirati-Etihad is not a bad name. It means United Emirates or Emirates United (not football). To avoid losing already secured world trade mark, Emirati is not too far from Emirates, it's an Arabic name and so is Etihad.
DXB and AUH airports may resize and still be used to serve both populations of AUH and DXB.
DXB's problems are not oil. It's liquidity. The money vanished from there and now they are short of cash. Investors are afraid. DXB should go back to the basics and concentrate their efforts on tourism because of the long and attractive sea coast, the desert and the mountain of the northern Emirates. They should also concentrate on their old trade mark of import/export and consequently cheap goods, and so attract tourism. They can continue advertising the name across the world, make still loads of money, but not filthy fortunes.
Who will be the best Chairman, the best CEO, and the best VPs for the different areas? Who will prevail despite the muscling from AUH? How long will the whole thing take?
AUH and DXB will have the interest of flying the Emirates flag on the acft tails across the world as EK does at the moment, but other cosmetic changes will have to happen. Will JXB be a compromise as the HQ? Will the EY fuselage painting match the EK tail? Maybe!
Emirati-Etihad is not a bad name. It means United Emirates or Emirates United (not football). To avoid losing already secured world trade mark, Emirati is not too far from Emirates, it's an Arabic name and so is Etihad.
DXB and AUH airports may resize and still be used to serve both populations of AUH and DXB.
DXB's problems are not oil. It's liquidity. The money vanished from there and now they are short of cash. Investors are afraid. DXB should go back to the basics and concentrate their efforts on tourism because of the long and attractive sea coast, the desert and the mountain of the northern Emirates. They should also concentrate on their old trade mark of import/export and consequently cheap goods, and so attract tourism. They can continue advertising the name across the world, make still loads of money, but not filthy fortunes.
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Thanks Nolimit.
I am well aware of the meaning of the R in Pprune (in fact I was aware of it when I joined the Forum around 5 years before you
). However, there are some on here that post with such authority that their word is taken as gospel!
Around 5 hours ago, a mate at Etihad called me to TELL me that Abu Dhabi now owns 40% of EK!!! (Transpires that a mate of a mate of a mate read it on these very pages and passed the good news on)
As I said, the merger/Abu Dhabi buyout is (for now at least) complete and utter tripe!
I am well aware of the meaning of the R in Pprune (in fact I was aware of it when I joined the Forum around 5 years before you
). However, there are some on here that post with such authority that their word is taken as gospel!Around 5 hours ago, a mate at Etihad called me to TELL me that Abu Dhabi now owns 40% of EK!!! (Transpires that a mate of a mate of a mate read it on these very pages and passed the good news on
)As I said, the merger/Abu Dhabi buyout is (for now at least) complete and utter tripe!
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The credit crunch and the Dubai model
By Christopher Davidson. Christopher Davidson is a fellow of the Institute for Middle Eastern Studies at Durham University. He is the author of "Dubai: The Vulnerability of Success" and "The United Arab Emirates: A Study in Survival." This commentary first appeared at bitterlemons-international.org, an online newsletter. Here it is:
These are not my words, and they do not tell us implicitly of any take-overs, but one can read in between the lines that something will have to happen, if this is not happening already, behind the scenes. AUH will not do any deal(s) unless the move is advantageous for the Al Nahyan Household let alone the Emirate itself if referring to institutional terms. It won't be a temporary gig
.
One thing is certain; they will hide it for as long as possible. Once in the open
, this will be vehemently denied by the WAM News Agency. I'll be here to see 
.
The credit crunch is moving around the world, claiming new scalps every week. Toxicity has spread from mature US financials to Europe and Britain and now it is the turn of the developing world. When the crunch hits a region, confidence rapidly falls, banks are jeopardized and credit dries up. The Western extractive states have been able to rescue their financial sectors by part-nationalizing banks and injecting liquidity. These are abilities that weaker states do not have.
Thus far, the Gulf states have remained fairly isolated from the impact of the crunch, partly due to the cushioning effect of surplus liquidity in their immediate neighborhood and the unspoken guarantee that massive sovereign wealth can be used to shore up any domestic collapse. Indeed, up until a few months ago the mood had been one of optimism, with many stakeholders in these economies contending that the region is impervious to the West's problems and that it is has successfully decoupled from any global recession. Rightly, it has been argued that even plummeting oil prices are not a problem, as the annualized returns from the various overseas investment funds in many cases exceed total oil revenues.
This view does not however appreciate the heterogeneity of Gulf states' economies. Certainly, Kuwait, Qatar and the UAE's Abu Dhabi are in very good shape: They have massive oil and gas exports and the largest sovereign wealth assets in the world. They also have relatively small national populations to distribute their wealth to. But in contrast, the more resource-scarce Gulf states, notably Bahrain, Oman and the UAE's Dubai, are now highly exposed to the credit crunch.
Since the 1990s, these economies have sought to diversify their economies away from hydrocarbon exports and heavy, energy-reliant industries, often by building up new sectors such as real estate and tourism. On paper this diversification has been successful: Other associated sectors such as construction have boomed, and in Dubai's case the non-oil share of the emirate's GDP has grown to over 90 percent. Moreover, the rapid economic liberalization required to kick-start these new sectors and the many lavish projects they have involved have won these countries international recognition and praise.
The year 2008 will, however, expose the fundamental flaws in these new post-oil economies. They have been built on a wave of global boom, relying on excess liquidity in their oil-rich neighbors and massive and uninterrupted foreign direct investment from further afield, often from the West. Indeed, they have never been put to the test as they have yet to really experience a true boom-bust cycle. The sectors that have been developed are particularly sensitive to a global downswing, indeed are prime examples of "peripheral economies" that have to respond in a dependent fashion to circumstances and retrenchment decision-making in the world's "core economies".
The biggest victim is likely to be Dubai, as real estate and tourism (and by extension construction) have been allowed to develop into the key pillars of the economy. No moratorium has been placed on the expansion of these sectors and the city state has grown wildly in the last few years, with growth rates that would normally be associated with an overheating economy and rampant, unrestrained speculation. Furthermore, few sustainable economic activities have been introduced and attempts to build a vibrant knowledge economy have remained stalled.
International financial observers and realtors have now begun to identify worrying trends: rapidly declining house prices, a stagnant resale market, the inability of off-plan property investors to keep up with their payment schedules, a marked decline in hotel occupancy rates and wage and hiring freezes in property companies. To make matters worse, they have highlighted the government's indebtedness: Dubai has borrowed heavily in recent years to finance all of the physical infrastructure needed to support and connect these new economic sectors. Thus, if the situation should deteriorate further - as it may well be doing given that large mortgage lenders have already had to be merged - there is a question mark as to whether the government can step in and come to the rescue.
But in some ways, the true merits or demerits of the Dubai model may never come to light, as the UAE brand is likely to be resurrected should Abu Dhabi intervene and bail out its close neighbor.
Thus far, the Gulf states have remained fairly isolated from the impact of the crunch, partly due to the cushioning effect of surplus liquidity in their immediate neighborhood and the unspoken guarantee that massive sovereign wealth can be used to shore up any domestic collapse. Indeed, up until a few months ago the mood had been one of optimism, with many stakeholders in these economies contending that the region is impervious to the West's problems and that it is has successfully decoupled from any global recession. Rightly, it has been argued that even plummeting oil prices are not a problem, as the annualized returns from the various overseas investment funds in many cases exceed total oil revenues.
This view does not however appreciate the heterogeneity of Gulf states' economies. Certainly, Kuwait, Qatar and the UAE's Abu Dhabi are in very good shape: They have massive oil and gas exports and the largest sovereign wealth assets in the world. They also have relatively small national populations to distribute their wealth to. But in contrast, the more resource-scarce Gulf states, notably Bahrain, Oman and the UAE's Dubai, are now highly exposed to the credit crunch.
Since the 1990s, these economies have sought to diversify their economies away from hydrocarbon exports and heavy, energy-reliant industries, often by building up new sectors such as real estate and tourism. On paper this diversification has been successful: Other associated sectors such as construction have boomed, and in Dubai's case the non-oil share of the emirate's GDP has grown to over 90 percent. Moreover, the rapid economic liberalization required to kick-start these new sectors and the many lavish projects they have involved have won these countries international recognition and praise.
The year 2008 will, however, expose the fundamental flaws in these new post-oil economies. They have been built on a wave of global boom, relying on excess liquidity in their oil-rich neighbors and massive and uninterrupted foreign direct investment from further afield, often from the West. Indeed, they have never been put to the test as they have yet to really experience a true boom-bust cycle. The sectors that have been developed are particularly sensitive to a global downswing, indeed are prime examples of "peripheral economies" that have to respond in a dependent fashion to circumstances and retrenchment decision-making in the world's "core economies".
The biggest victim is likely to be Dubai, as real estate and tourism (and by extension construction) have been allowed to develop into the key pillars of the economy. No moratorium has been placed on the expansion of these sectors and the city state has grown wildly in the last few years, with growth rates that would normally be associated with an overheating economy and rampant, unrestrained speculation. Furthermore, few sustainable economic activities have been introduced and attempts to build a vibrant knowledge economy have remained stalled.
International financial observers and realtors have now begun to identify worrying trends: rapidly declining house prices, a stagnant resale market, the inability of off-plan property investors to keep up with their payment schedules, a marked decline in hotel occupancy rates and wage and hiring freezes in property companies. To make matters worse, they have highlighted the government's indebtedness: Dubai has borrowed heavily in recent years to finance all of the physical infrastructure needed to support and connect these new economic sectors. Thus, if the situation should deteriorate further - as it may well be doing given that large mortgage lenders have already had to be merged - there is a question mark as to whether the government can step in and come to the rescue.
But in some ways, the true merits or demerits of the Dubai model may never come to light, as the UAE brand is likely to be resurrected should Abu Dhabi intervene and bail out its close neighbor.
.One thing is certain; they will hide it for as long as possible. Once in the open
, this will be vehemently denied by the WAM News Agency. I'll be here to see .
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Why's that Broken?
Is EK not one of the most profitable airlines on the planet? I assume the only reason Abu Dhabi would be remotely interested in EK is due to this very fact!!
That is why EK will do just fine without help from the South......
Not only that guys just look at it in simple terms. TC intimated at the begining of the year (when the IPO possibility was being put about) that EK had a market value of around $20bn. Assuming Abu Dhabi wanted 50% of it, they would only be putting $10bn into the Dubai coffers. Sounds like a lot to you and I, but really its a drop in the ocean for the Dish Dash brigade around here and would make bugger all difference to the liquidity issues in Dubai.
Even if, AD wanted 50% of EK as a 'good will' gesture for bailing out Dubai, it would make naff all difference to the way EK is run as a business, simply due to the fact that AD would want the same (successful) business model to keep bringing in the cash in the future, and there is no way they would SPOIL that model by merging it with a completely unprofitable one (EY).
Is EK not one of the most profitable airlines on the planet? I assume the only reason Abu Dhabi would be remotely interested in EK is due to this very fact!!
That is why EK will do just fine without help from the South......
Not only that guys just look at it in simple terms. TC intimated at the begining of the year (when the IPO possibility was being put about) that EK had a market value of around $20bn. Assuming Abu Dhabi wanted 50% of it, they would only be putting $10bn into the Dubai coffers. Sounds like a lot to you and I, but really its a drop in the ocean for the Dish Dash brigade around here and would make bugger all difference to the liquidity issues in Dubai.
Even if, AD wanted 50% of EK as a 'good will' gesture for bailing out Dubai, it would make naff all difference to the way EK is run as a business, simply due to the fact that AD would want the same (successful) business model to keep bringing in the cash in the future, and there is no way they would SPOIL that model by merging it with a completely unprofitable one (EY).
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Now now pop,
No need to start waving it around claiming it's bigger with regards to how long you've been on PPRune. Especially since "DOJ" on PPRune only reflects my current identity, not past ones... and if anything that only makes it seem a little more daft that you're getting all bent that someone would *gasp* post rumours on a rumour site...
Back on point, as much as I hope you are correct, your entire argument seems to be based on opposing speculation (which is what I consider the financial reputation of any Middle East company to be). You cannot on one hand say that none of us would ever know what truly is going on, but then so completely buy the financial reportings of EK as gospel. Bit of a logical disconnect.
As I said, hope you're right. But the only statement I truly agree with is that with these secret squirrels, we won't know until it's done.
No need to start waving it around claiming it's bigger with regards to how long you've been on PPRune. Especially since "DOJ" on PPRune only reflects my current identity, not past ones... and if anything that only makes it seem a little more daft that you're getting all bent that someone would *gasp* post rumours on a rumour site...
Back on point, as much as I hope you are correct, your entire argument seems to be based on opposing speculation (which is what I consider the financial reputation of any Middle East company to be). You cannot on one hand say that none of us would ever know what truly is going on, but then so completely buy the financial reportings of EK as gospel. Bit of a logical disconnect.
As I said, hope you're right. But the only statement I truly agree with is that with these secret squirrels, we won't know until it's done.
