Emirates’ $18 Billion Boeing Order Kicks off Air Show

November 17, 2011 by · Leave a Comment 

By Praveen Menon and Tim Hepher

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An Emirates Airlines Boeing 777-300 aircraft takes off during the second day of the Dubai Airshow November 14, 2011.

REUTERS/Nikhil Monteiro

DUBAI (Reuters) – Emirates airline placed a blockbuster order for 50 Boeing 777 jetliners at the Dubai Air Show on Sunday, underscoring the confidence brimming among fast-growing Gulf airlines despite growing fears of stalling global growth.

The Dubai government-owned carrier, expanding its role as the world’s largest operator of Boeing’s most profitable plane, said the deal was worth $18 billion, the largest commercial order by value in the U.S. planemaker’s history.

Reuters reported on Friday that Emirates, which has led efforts by Gulf-based carriers to challenge European and Asian carriers by establishing the region as a major East-West hub, would place an order of between 30 and 50 Boeing 777 aircraft.

“This order represents a milestone — it is the single largest dollar value (order) in the Boeing history,” Emirates Chairman Sheikh Ahmed bin Saeed al Maktoum said at a press conference, before signing the deal with Boeing representatives as Dubai’s ruler, Sheikh Mohammed bin Rashid al Maktoum, looked on.

“(The) 777 has served Emirates very well in terms of seat costs … especially when we see the fuel price is quite high.”

Fuel costs took a big toll on the airline’s first half profits, sending them down 76 percent.

Emirates said it had adequate financing in place for 2012, and planned no new bond issue. Sheikh Ahmed said the airline, which launched a heavily oversubscribed $1 billion bond in June, would consider a bond if needed and if the timing was right, adding “we don’t have a push.”

Including options to buy 20 more of the twin-aisle aircraft and other agreements, the total deal is worth $26 billion, Emirates and Boeing said.

The airline planned to eye a mix of funding options for the order, including Islamic finance, he added. Delivery of the aircraft is slated to begin in 2015.

James Albaugh, chief of Boeing’s commercial division, said the order would sustain thousands of U.S. jobs.

Boeing delivered 127 commercial airplanes in the third quarter, including 100 of its best-selling 737 narrowbodies and 21 widebody 777s. The planemaker, which gets paid for its airplanes at delivery, set its commercial airplane delivery guidance for 2011 at about 480, down from previous guidance of 485 to 495.

GULF CARRIERS SPLASH OUT

Gulf airlines and lessors are set to splash out on Airbus and Boeing jets at the November 13-17 air show, underscoring the region’s role as the industry’s chief paymaster amid Europe’s worsening sovereign debt crisis.

Qatar Airways is expected to place a $6.5-billion order for 50 fuel-saving A320neo jets and five A380s from Airbus , and Kuwait lessor Alafco plans to boost a provisional order for 30 Airbus A320neos, industry sources said.

A muted air show two years ago came days before Dubai lurched into its own property and financial crisis in 2009, but the city state has been recovering after a bailout from neighboring Abu Dhabi.
Dubai’s ruler Sheikh Mohammed spent hours at the airshow, looking at commercial and military planes and touring the floor before taking a seat at the Emirates news conference, underscoring the keen interest that the emirate has in the success of its airline and ambitions for Dubai to become a major hub.

Demand for passenger aircraft has been remarkably robust led by rising numbers of middle classes in Asia and the Middle East and a shift of economic power from the West, but some analysts fear a contagion from Europe’s spiraling debt crisis.

“Nothing goes up forever but we really believe the demand for airplanes is driven by world GDP,” Boeing Commercial Airplanes Chief Executive Jim Albaugh said on the eve of the show.

“It goes up by about one and a half times GDP, and while you have spikes .. the long-term direction is pretty positive.”

EUROFIGHTER CHALLENGE

Increasing competition to sell military hardware to Gulf states amid rising tensions over Iran’s nuclear activities also dominated the start of the show.

In a blow to France, an $11 billion contest to sell fighters to the UAE heated up on the eve of the event when the Eurofighter consortium disclosed it had been asked to present its Typhoon warplane to the country’s top military.

A spokesman for the consortium from Britain, Germany, Italy and Spain confirmed a report on the briefing in industry publication Flightglobal.com, but declined further comment.

The briefing by UK officials took place in October in response to a request from the UAE, which has held long-running talks with France over a purchase of up to 60 Dassault-built Rafale fighters.

The move injected unexpected drama into the military side of the Dubai Air Show, which will feature rival flying displays by both jets.

Dassault Aviation Chief Executive Charles Edelstenne shrugged off the assault by the Eurofighter club which France backed away from in the 1980s to concentrate on developing its own independent successor to the Mirage.

“That’s very good, I’m happy,” he told Reuters, walking briskly among displays of military U.S., European and Russian military hardware.

Asked if he was disappointed about the decision to bring in a potential new bidder, he said, “No.”

The UAE has been in talks with France since 2008 but discussions have been subjected to occasional disruption and the UAE has also enquired about the Boeing F/A18 Super Hornet.

President Nicolas Sarkozy has made it a priority to find a foreign buyer for the multi-role Rafale, billed as one of the most effective but also one of the most expensive fighter jets in the world.

Analysts say rising geopolitical tensions surrounding Iran could lead to a spike in defense orders.

(Additional reporting by Sitaraman Shankar and Nadia Saleem; Editing by Amran Abocar and Reed Stevenson)

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While You Were Sleeping

May 6, 2010 by · Leave a Comment 

By Sumayyah Meehan, MMNS Middle East Correspondent

COV_iranFlag This week has seen a spurt of would-be terror plots that painfully highlights the reality that our world is still not as safe as it should be, despite the two wars still being waged against purported terrorist regimes. The most notable occurred in the heart of New York City as Pakistani-American Faisal Shahzad has confessed to being the mastermind behind the car bomb that, luckily, did not explode in Times Square. Shahzad was just barely apprehended as he sat on an Emirates flight set for Dubai.

The tiny Gulf State of Kuwait also got its own dose of a potential terror-plot in the making when security personnel unraveled a tangled web of deceit within its own borders. A ‘sleeper cell’ network of spies, apparently working covertly for the Iranian government’s Revolutionary Guard, was exposed this past week much to the surprise of the denizens of the region. For weeks, local Kuwaiti newspapers have been reporting renewed ties between Kuwait and Iran as well as a couple of deals, like oil exports. By all appearances the sleeper cell was put into place to gather intelligence on primary Kuwaiti and American targets, in the event that America decided to take a preemptive military strike against Iran. Iranian President has always promised to lash out at any Gulf neighbor that allows its land to be used by the US and its allies in a show of force against Iran.

Kuwait’s security forces have arrested at least eleven high-ranking Kuwaiti citizens that worked in close proximity to both the interior and defense ministries as well as several Arab nationals whose nationalities have not been released. During the bust, Kuwaiti security personnel raided the home of one of the leaders of the sleeper cell and found a great deal of incriminating evidence including maps for sensitive targets in Kuwait, hi-tech gadgetry and an estimated $250,000 stockpile of cold hard cash. Key players within the sleeper cell have also revealed to Kuwait security forces that they were instructed to recruit new members from Kuwait that were sympathetic to the plight of Iranians.

It’s not surprising that Kuwait was chosen as a primary location for the Iranian sleeper cell to settle in unnoticed. There are several American army bases littered throughout the country and Kuwait is a key stopping point for American troops headed to the frontlines in Iraq and Afghanistan. However, the strongest reason is most likely the friendship that Kuwait and America have built ever since the 1991 Desert Storm war, where America and its allies literally pulled Kuwait out of the clutches of the late Iraqi President Saddam Hussein.

Word out of Iran is that the whole fiasco is merely a chance for Kuwait to discredit the country. However, the evidence is strongly leaning towards the validity of the sleeper cell and the Iranian governments full knowledge of its existence. And according to the Kuwaiti government there are still at least seven more members of the sleeper cell who have not yet been apprehended. But what is most disturbing is that interrogations with the suspects are slowly revealing that the espionage stretches clean across the Gulf Corporation Council (GCC) member states with several Gulf countries supposedly having an invisible sleeper cell operating from within. Leaders from the Arab world are expected to meet in the foreseeable future to join forces in combating Iranian spy rings.

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Saudi-India Ties: “A New Era of Strategic Partnership”

March 4, 2010 by · Leave a Comment 

By Nilofar Suhrawardy, MMNS India Correspondent

2010-03-01T142216Z_1695035870_GM1E6311LXT01_RTRMADP_3_SAUDI

India’s Prime Minister Manmohan Singh (R) stands next to his wife Gursharan Kaur as he is given a King Saud University sash during a visit to the university in Riyadh March 1, 2010.

REUTERS/Stringer

NEW DELHI:  Prime Minister Manmohan Singh described his three-day visit to Saudi Arabia as “very productive and fruitful” (February 27 to March 1). The highlight of his visit was inking of “Riyadh Declaration: A New Era of Strategic Partnership,” by Saudi King Abdullah bin Abdulaziz Al Saud and the Indian Prime Minister. The declaration signed on February 28, states that the two leaders held “in depth discussions on a wide range of issues in an atmosphere of utmost warmth, cordiality, friendship and transparency.” They agreed that Saudi King’s India-visit in 2006, during which the Delhi Declaration was signed (January 27, 2006), and Singh’s “current” visit “heralded a new era in Saudi-India relations” “in keeping with changing realities and unfolding opportunities of the 21st century.”

In addition to laying stress on strengthening of bilateral ties between India and Saudi Arabia, the declaration highlights the crucial global issues discussed by the two leaders. They “noted that tolerance, religious harmony and brotherhood, irrespective of faith or ethnic background, were part of the principles and values of both countries.” Condemning terrorism, extremism and violence, they affirmed that “it is global and threatens all societies and is not linked to any race, color or belief.” “The international community must,” according to the declaration, “resolutely combat terrorism.”

With the peace process in Middle East high on their agenda, the two leaders “expressed hope for early resumption of the peace process,” “within a definite timeframe leading to establishment of a sovereign, independent, united and viable Palestinian State in accordance with the two-state solution.” They “emphasized” in the declaration that “continued building of settlements by Israel constitutes a fundamental stumbling block for the peace process.”

The declaration strongly signals their being against nuclear weapons while they favor peaceful uses of nuclear energy. The two leaders “emphasized the importance of regional and international efforts” directed towards making “Middle East and Gulf Region free of all nuclear weapons and all weapons of mass destruction,” according to the declaration. They “reiterated their support” to “resolve issues relating to Iran’s nuclear program peacefully through dialogue and called for continuation of these efforts.” They “encouraged Iran to respond” to these efforts to “remove doubts about its nuclear program, especially as these ensure the right of Iran and other countries to peaceful uses if nuclear energy” in keeping with procedures of International Atomic Energy Agency, the declaration states.

The situation in Afghanistan and Iraq also figured in their discussions. They called for “preservation of Afghanistan’s sovereignty and independence.” They “expressed hope” that forthcoming elections will help people of Iraq “realize their aspirations” by ensuring them security, stability, territorial integrity and national unity.

Though Indo-Pak relations are not mentioned in the Declaration, they figured prominently in discussions held between the two sides. While addressing the Saudi Parliament, Majlis-Al-Shura at Riyadh (March 1), Singh said: “India wishes to live in peace and friendship with its neighbors.” “We seek cooperative relations with Pakistan. Our objective is a permanent peace because we recognize that we are bound together by a shared future. If there is cooperation between India and Pakistan, vast opportunities will open up for trade, travel and development that will create prosperity in both countries and in South Asia as a whole. But to realize this vision, Pakistan must act decisively against terrorism. If Pakistan cooperates with India, there is no problem that we cannot solve and we can walk the extra mile to open a new chapter in relations between our two countries,” Singh stated.

During his interaction with media persons, to a question on whether Saudi Arabia can be “credible interlocutor” on some issues between India and Pakistan, Singh replied: “Well I know Saudi Arabia has close relations with Pakistan. I did discuss the Indo-Pak relations with His Majesty on a one-to-one basis. I explained to him the role that terrorism, aided, abetted and inspired by Pakistan is playing in our country. And I did not ask for him to do anything other than to use his good offices to persuade Pakistan to desist from this path.”

While addressing the Saudi Parliament, Singh highlighted importance Islam has for India. Describing Saudi Arabia as “the cradle of Islam and the land of the revelation of the Holy Quran,” Singh said: “Islam qualitatively changed the character and personality of the people in Arabia as it enriched the lives of millions of Indians who embraced this new faith.” Tracing their historical ties, he said: “It is said that during the reign of the Mughal Emperor Shah Jahan, Indian pilgrims constituted the largest movement of people by sea. Indian Muslim scholars went to Mecca in order to learn Islamic theology. Arab Muslim scholars came to India to learn mathematics, science, astronomy and philosophy. These exchanges led to the widespread diffusion of knowledge in the sciences, arts, religion and philosophy.”

“Today, Islam is an integral part of India’s nationhood and ethos and of the rich tapestry of its culture. India has made significant contributions to all aspects of Islamic civilization. Centers of Islamic learning in India have made a seminal contribution to Islamic and Arabic studies. Our 160 million Muslims are contributing to our nation building efforts and have excelled in all walks of life. We are proud of our composite culture and of our tradition of different faiths and communities living together in harmony,” Singh said.

Undeniably, the Indian Prime Minister’s visit to Saudi Arabia symbolizes the two countries’ desire to strengthen their ties, “upgrade the quality” of their “relationship to that of a strategic partnership,” as stated by Singh. During his visit, Singh also paid special attention to highlight importance of Islam from the Indian perspective. Besides, the Riyadh declaration specifically condemns terrorism and states that it cannot be linked with any “belief.” In addition to strengthening ties with Saudi Arabia, Singh’s words suggest that he is hopeful of it setting the stage for improving relations with other Muslim countries; it will enhance his government’s image at home among the business community eyeing for more trade opportunities with the Arab world and gain his party greater support from Indian Muslims.

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Will Obama Play the War Card?

February 11, 2010 by · Leave a Comment 

By Patrick J. Buchanan, Antiwar.com

Republicans already counting the seats they will pick up this fall should keep in mind Obama has a big card yet to play.

Should the president declare he has gone the last mile for a negotiated end to Iran’s nuclear program and impose the “crippling” sanctions he promised in 2008, America would be on an escalator to confrontation that could lead straight to war.

And should war come, that would be the end of GOP dreams of adding three-dozen seats in the House and half a dozen in the Senate.

Harry Reid is surely aware a U.S. clash with Iran, with him at the presidents side, could assure his re-election. Last week, Reid whistled through the Senate, by voice vote, a bill to put us on that escalator.

Senate bill 2799 would punish any company exporting gasoline to Iran. Though swimming in oil, Iran has a limited refining capacity and must import 40 percent of the gas to operate its cars and trucks and heat its homes.

And cutting off a country’s oil or gas is a proven path to war.

In 1941, the United States froze Japans assets, denying her the funds to pay for the U.S. oil on which she relied, forcing Tokyo either to retreat from her empire or seize the only oil in reach, in the Dutch East Indies.

The only force able to interfere with a Japanese drive into the East Indies? The U.S. Pacific fleet at Pearl Harbor.

Egypts Gamel Abdel Nasser in 1967 threatened to close the Straits of Tiran between the Red Sea and Gulf of Aqaba to ships going to the Israeli port of Elath. That would have cut off 95 percent of Israel’s oil.

Israel response: a pre-emptive war that destroyed Egypt’s air force and put Israeli troops at Sharm el-Sheikh on the Straits of Tiran.

Were Reid and colleagues seeking to strengthen Obama’s negotiating hand?

The opposite is true. The Senate is trying to force Obama’s hand, box him in, restrict his freedom of action, by making him impose sanctions that would cut off the negotiating track and put us on a track to war a war to deny Iran weapons that the U.S. Intelligence community said in December 2007 Iran gave up trying to acquire in 2003.

Sound familiar?

Republican leader Mitch McConnell has made clear the Senate is seizing control of the Iran portfolio. “If the Obama administration will not take action against this regime, then Congress must.”

U.S. interests would seem to dictate supporting those elements in Iran who wish to be rid of the regime and re-engage the West. But if that is our goal, the Senate bill, and a House version that passed 412 to 12, seem almost diabolically perverse.

For a cutoff in gas would hammer Irans middle class. The Revolutionary Guard and Basij militia on their motorbikes would get all they need. Thus the leaders of the Green Movement who have stood up to Mahmoud Ahmadinejad and the Ayatollah oppose sanctions that inflict suffering on their own people.

Cutting off gas to Iran would cause many deaths. And the families of the sick, the old, the weak, the women and the children who die are unlikely to feel gratitude toward those who killed them.

And despite the hysteria about Iran’s imminent testing of a bomb, the U.S. intelligence community still has not changed its finding that Tehran is not seeking a bomb.

The low-enriched uranium at Natanz, enough for one test, has neither been moved nor enriched to weapons grade. Ahmadinejad this week offered to take the Wests deal and trade it for fuel for its reactor. Irans known nuclear facilities are under U.N. watch. The number of centrifuges operating at Natanz has fallen below 4,000. There is speculation they are breaking down or have been sabotaged.

And if Iran is hell-bent on a bomb, why has Director of National Intelligence Dennis Blair not revised the 2007 finding and given us the hard evidence?

U.S. anti-missile ships are moving into the Gulf. Anti-missile batteries are being deployed on the Arab shore. Yet, Gen. David Petraeus warned yesterday that a strike on Iran could stir nationalist sentiment behind the regime.

Nevertheless, the war drums have again begun to beat.

Daniel Pipes in a National Review Online piece featured by the Jerusalem Post “How to Save the Obama Presidency: Bomb Iran” urges Obama to make a “dramatic gesture to change the public perception of him as a lightweight, bumbling ideologue” by ordering the U.S. military to attack Irans nuclear facilities.

Citing six polls, Pipes says Americans support an attack today and will “presumably rally around the flag” when the bombs fall.

Will Obama cynically yield to temptation, play the war card and make “conservatives swoon,” in Pipes phrase, to save himself and his party? We shall see.

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The Arab Bailout

October 30, 2008 by · Leave a Comment 

By Sumayyah Meehan, MMNS

bank-op

Vans line up at Gulf Bank to deliver money to the bank branches.

Photo Courtesy www.248am.com.

When news of the U.S. bailout hit the Middle East newswire, the snickering could most likely have been heard halfway around the World. There is no love lost between the U.S. and most Gulf States as the mass majority of Gulf residents view the U.S. as an aggressor and not the liberator they claim to be. However, no one is laughing now as the very first casualty of the World economic crisis, stemming directly from the U.S. bailout, has fallen right in the State of Kuwait, which is sure to send shockwaves to neighboring GCC nations.

One of the most prestigious and trusted financial institutions in Kuwait, Gulf Bank, had to be bailed out by the Kuwaiti government this past week. As Kuwait’s second largest lender, Gulf Bank suffered losses as a result of trading in oil derivatives and its’ own investors refused to help settle those losses. The Central Bank of Kuwait (CBK) has stepped in and is quoted as saying it, “backs the bank and fully guarantees its deposits.” The CBK also halted trading by Gulf Bank in the Kuwait Stock Exchange and sent its’ own surpervisors to deal with risk management. Bank records will be closely scrutinized to determine the scale of the risks the bank took without the knowledge of the CBK.

From the moment the news broke in this tiny Gulf nation, jittery Gulf Bank customers raced to the nearest ATM’s, local branches and even online to immediately withdraw the full balances from their accounts. All of the branches were swarmed with panic-stricken customers and rioting nearly broke out at one of those branches. By the mid-morning of the first day it is estimated that over $100 million US dollars was withdrawn. By the second day, rumors were rife that the all the Gulf Bank branches were under lockdown and customers were being limited as to how much they could withdraw from the ATM machines.

However, to hear Gulf Banks version of the events over the past few days, one might feel like they’ve entered the ‘Twilight Zone’. According to General Manager for Board Affairs Fawzy Al-Thunayan the reason for so many customers descending on the branches of the bank is because, “It’s the time of salaries … It’s the end of the month.” Al-Thunayan also denied that money from CBK is being pumped into his bank despite reports of several armored vehicles being spotted lined up at many of the main branches. 

Weighing in on the turmoil facing Gulf Bank, an employee of one of their main rivals National Bank of Kuwait (NBK) had this to say, “Our bank has been in business since 1952 and we know how to handle our client’s money. If Gulf Bank is having problems, small investors have the right to withdraw their money and look for other banking options.” As the largest lender, by assets, its not surprising that former Gulf Bank customers have been flooding NBK to open up new accounts.

So far Gulf Bank is the first ever Kuwaiti bank to buckle under the pressure of an increasingly uncertain global economy. Other banks in Kuwait are discussing ways to safeguard themselves from falling into a similar situation. A local Arabic daily newspaper has reported that at least four proposals for mergers between Kuwaiti banks have been received by the CBK. By merging into a larger entity, banks can best weather the current economic firestorm.

While Kuwait is the first country to see the demise of one of its’ banks up close and personal, it is not the first country to guarantee bank deposits. The UAE took the preventative measure of calming down its’ investors and clients by guaranteeing all deposits in the first quarter of October 2008.

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