Middle East Business News Review

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Oman Air has also made a spectacular move to match regional rivals Emirates after the Muscat-based airlines announced an order of six Boeing 787-8s Dreamliners at the Dubai Airshow. Oman Air currently operates direct flights to 41 destinations across the Middle East, Europe and Asia. “We see direct benefits because of the Dreamliner’s fuel efficiency and operating economics as well as the enhanced travel experience that Oman Air will be able to offer its customers aboard this airplane,” Oman Air’s CEO Peter Hill said in his statement at the Dubai Airshow.

Alafco, a Kuwait-based aviation leasing and finance company, announced an expanded order for 50 Airbus A320neo aircraft along with options for 30 more such aircraft by year-end. The Kuwaiti company has already received 25 A320s to date from a previously placed order. “The significant fuel burn savings it offers, combined with the operational reliability and cost effectiveness of the A320 family, make it an absolute ‘must have’ in our portfolio to meet the demand and the requirements of our customers,” Ahmed Al Zabin, Alafco chairman, said in his statement.

Kuwaiti finance minister has expressed his deep concerns over public sector wages equivalent to about 85 per cent of the oil rich country’s revenues. “This reflects the seriousness of the situation, if the rapid increase in wages continues,” Mustapha al-Shamali told parliament while adding that public wage increases pose a “real threat” to the state budget. He explained that a sharp increase in spending might cause a budget deficit. “The country might then have to lower the value of its currency, liquidate investments or make withdrawals from state reserves,” the finance minister said.

Meanwhile, Kuwait has also announced raising its oil output to more than 3 million barrels per day. Mohammad Al-Busairi said the global market is suffering from a shortage of 1 to 1.5 million barrels per day till the end of the current year, and as a result, his government has increased its oil production to boost supplies.

According to Alpen Capital’s latest GCC Retail Report, retail sales in the Gulf Co-operation Council is expected to reach $240.3 billion and will grow at a compound annual growth rate (CAGR) of 8.3 per cent till 2015. “The retail industry has been one of the fastest growing sectors in the Middle East for the last few years. It is the second largest sector in the oil-rich GCC region, and is considered to be the most preferred means of promoting diversification and sustained economic development in the region,” Sameena Ahmad, Managing Director at Alpen Capital, said.

The Real Estate regulatory Authority (RERA) announced it has accredited 18 auditing firms to conduct financial check on property projects in Dubai. “Auditing will significantly facilitate the work of project trustees by preparing solid financial reports on real estate projects sold on the map,” Khalid Obaid Al Mutaiwei, senior director of the Real Estate Development Trust Account Department at RERA said.

Increased volatility in Persian Gulf due to the standoff with Iran, eurozone sovereign debt crisis and soaring yield of Italian bonds have led to the decline of Dubai’s shares. Shares of Air Arabia, the Middle Easts biggest no-frills airline, dropped 1.4 percent after Morgan Stanley cut its price estimate by 4.6 percent. Emirates Integrated Telecommunications Company’s shares, the United Arab Emirates phone company known as Du, dipped to its lowest during the last two weeks. Dubais DFM General Index (DFMGI) retreated 0.4 percent to 1,387.81 at the 2 p.m. close in the emirate after rising 0.7 percent Sunday.

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