Middle East Business Review – 15 February

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Luxury hotels in Abu Dhabi have expressed concerns about falling profitability amid increased competition as more and more hotels are opening up in the UAE capital. “The price war exists. In some cases you have five-star hotels competing with three-star prices. This is mainly created by general managers trying to fill hotels,” said Ali Hamad Lakhraim, the president and chief executive of Millennium & Copthorne Hotels for the Middle East and Africa, which operates the Grand Millennium Al Wahda in the capital. Hotel managements have complained profitability has already fallen by 50% since six luxury hotels opened in Abu Dhabi within a short span of time.

Chairman of Dubai’s Supreme Fiscal Committee announced Dubai’s economy will grow 4.5% this year, up from last year’s 3%. Despite all the challenges, Dubai has recovered from the downturn and is now firmly on the growth track. Government-owned organisations have managed to generate higher revenues that will help us to overcome the challenges, Sheikh Ahmad Bin Saeed Al Maktoum told a conference on Dubai Economic Outlook 2012, organised by the Department of Economic Development (DED).

Emirates NBD bank, the UAE’s largest bank in terms of assets, reported a net profit of AED2.48 billion ($680m) for 2011, up 6% compared to AED2.33 billion ($630m) reported in 2010. The bank also reported a 7% increase in both net interest income and core fee income. We have taken a more conservative approach to strengthen the bank’s position to meet the challenges reflected in the broader global financial markets and Emirates NBD is on course to realise its vision to be the leading and one of the largest and most successful banks in the region, said Sheikh Ahmed bin Saeed Al Maktoum, Chairman of Emirates NBD.

Meanwhile, Emirates NBD finance chief, Surya Subramanian, said in a statement his bank’s acquisition of a struggling Emirates Islamic Bank, was partly bankrolled by the Abu Dhabi government. “We received a liquidity injection from the UAE ministry of finance. The Dubai Bank acquisition had the support of both Dubai and Abu Dhabi governments,” he said.

Emirates Airlines announced it is upgrading its service to Amsterdam by introducing a A380 super jumbo from August this year. To upgrade from a 777 operation to an A380 in a relatively short space of time demonstrates the strong demand from travellers to fly with Emirates and experience our superior products and services, Salem Obaidalla, Emirates senior vice president, Commercial Operations, Europe & Russian Federation, said while adding that the combination of introducing the largest passenger aircraft onto the route will benefit tourism and trade between the Netherlands and the UAE.

Marwan Bin Ghalitha, chief executive of Real Estate Regulatory Authority (RERA), announced Dubai’s property sector will get a new boost this year when more property units will be introduced later this year. “Another 15,000 to 16,000 (units) are coming in 2012. Most of this supply will be from master developers. About 62 projects were completed last year. I am sure the supply from these projects are coming in 2012,” he said in a statement while adding that 220 projects are under construction in Dubai at the moment.

Twickenham Film Group said it has set up a $313.6m fund to encourage Middle Eastern investors get involved in the British movie industry. Oasis Film Fund, part of the Twickenham Film Group of companies said in a statement in which they added that the fund aims to appeal to both individual and corporate Middle East investors keen to involve themselves within the booming British film industry.

Airbus Industrie has announced Kuwait-based Aviation Lease and Finance Company (ALAFCO) has placed an order of 35 more Airbus A320neo planes for $3.4 billion based on catalogue prices. The Kuwaiti group also booked an order of 50 A320neo aircraft during last year’s Dubai Airshow.

(By Moign Khawaja – Editor: Arabian Gazette)

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