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Blocked funds remain a significant challenge for airlines whose eligible money has been held by many countries, particularly those in Africa and Middle East..text-box { float:left; width:250px; padding:1px; border:1pt white; margin-top: 10px; margin-right: 15px; margin-bottom: 5px; margin-left: 20px;}@media only screen and (max-width: 767px) {.text-box {width: 30%;}}**media[39918]**As of April, globally, there is a total $2.3bn, in blocked funds. Of this, 80% is blocked in Africa and Middle East, for a total of $1.9bn, and out of that, nearly $1.6bn (70%) is tied up in African countries.In a recent interview with Gulf Times in Istanbul, IATA regional vice-president Kamil al-Awadhi said GCC carriers are badly affected as they cover the region extensively, Africa in particular.He cited the example of Nigeria, which has blocked a massive $812mn, funds which foreign airlines are eligible for.“It is the most amount blocked by any single African country. This having a negative socio-economic impact on Nigeria,” al-Awadhi noted.Because of blocked funds, Nigeria now faces reduction of airlines capacity, connectivity, higher ticket price, negative perception about the country’s overall business environment, discouraging investors into the Nigerian economy and impact on foreign direct investments“In view of these, many Nigerian travel agencies have downed their shutters,” noted al-Awadhi, the former CEO of Kuwait Airways.Cash flow is key for airlines’ business sustainability - when airlines are unable to repatriate their funds, it severely impedes their operations and limits the number of markets they can serve.He noted the consequences of reduced air connectivity include the erosion of that country’s competitiveness, diminished investor confidence and reputational harm caused by a perception that it is a high-risk place to do business.Strong connectivity is an economic enabler and generates considerable economic and social benefits.Globally, the top five countries account for 68% of blocked funds. Besides, Nigeria, the countries in the list are; Bangladesh ($214.1mn), Algeria ($196.3mn), Pakistan ($188.2mn) and Lebanon ($141.2mn).International Air Transport Association (IATA), the global body of more than 300 member airlines, urged governments to abide by international agreements and treaty obligations to enable airlines to repatriate these funds arising from the sale of tickets, cargo space, and other activities.Airlines incur unnecessary costs when they are unable to repatriate their overseas sales funds, freely or in a time-bound manner, industry analysts say.Typically, such costs occur when airlines' funds are forced to sit idle in foreign bank accounts as a result of foreign exchange shortages or regulatory obstacles put in place by certain governments.By blocking airline funds from ticket sales, various countries are depriving the aviation industry of the much-needed cash, in contravention of bilateral agreements and global standards.Holding back money belonging to airlines also discourages other carriers from serving the particular market, thereby reducing connectivity and options for passengers.For airlines, this can lead to cash flow problems, reduced profitability, operational difficulties, reduced investment and reputation damage.Blocked funds can cause significant cash flow problems for airlines, as they may not be able to access funds that are owed to them. This can impact their ability to pay for fuel, salaries, and other essential expenses, which could ultimately lead to financial difficulties and even bankruptcy.When funds are blocked, airlines may have to accept lower profits or even losses on their international routes. This is because they may be forced to sell tickets in local currency and then hold onto that currency until they can access it, which can result in exchange rate losses.These can also make it difficult for airlines to operate effectively. For example, they may be unable to pay their suppliers or service providers, which could impact their ability to maintain their aircraft, provide in-flight services, or even pay for landing fees and other airport charges.Trapped funds can discourage airlines from investing in new routes or expanding their operations in certain countries. This can limit the growth potential of airlines and may lead to missed business opportunities.IATA Director General Willie Walsh said: “Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets. Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity and job creation.”Al-Awadhi insisted that blocked funds was a major issue that airlines encountered, particularly in the Middle East and North Africa region.“I will be visiting some of the African countries this month and hope to meet authorities there. I wish to press them on releasing funds to airlines. Among them are GCC carriers who are badly hit because of funds blocked.“Covid-19 has decimated the airline industry, one of the worst crises hitting the industry in a century. Post-pandemic, airlines are trying to build up. Every penny counts now. We, therefore, call on governments to prioritise aviation in the access to foreign exchange on the basis that air connectivity is a vital key economic catalyst for the country,” al-Awadhi noted.

Istanbul: The International Air Transport Association (IATA) has urged governments around the world to live up to longstanding international treaty obligations to publish timely and thorough aviation accident reports. “Safety is aviation’s highest priority,” IATA Director General Willie Walsh said at a media briefing here Tuesday.Failure to publish prompt and complete accident investigation reports deprives operators, equipment manufacturers, regulators, infrastructure providers and other stakeholders concerned of critical information that could make flying even safer.“The accident investigation process is one of our most important learning tools when building global safety standards. But to learn from an accident, we need reports that are complete, accessible and timely,” Walsh noted.He said the requirements of the Convention of International Civil Aviation (Chicago Convention) Annex 13 are “clear”.Walsh said states in charge of an accident investigation must submit a preliminary report to the International Civil Aviation Organisation (ICAO) within 30 days of the accident, publish the final report, which is publicly available, as soon as possible and within 12 months of the accident.They must also publish interim statements annually should a final report not be possible within 12 months.Only 96 of the 214 accident investigations during the period 2018-2022 conform with the requirements of the Chicago Convention, Walsh noted.Just 31 reports were published in less than one year of the accident with the majority (58) taking between one to three years. In addition to the fact that final reports regularly take more than a year, interim statements often provide little more than what was presented in the preliminary report.“Over the past five years, fewer than half of the required accident reports meet the standards for thoroughness and timeliness. This is an inexcusable violation of requirements stated clearly in the Chicago Convention.“As an industry we must raise our voice to governments in defence of the accident investigation process enshrined in Annex 13. And we count on ICAO to remind states that the publication of a complete accident report is not optional, it is an obligation under Annex 13 of the Chicago Convention,” Walsh added.

Istanbul: Global aviation industry expects overall renewable fuel production to reach an estimated capacity of at least 69bn litres (55mn tonnes) by 2028.Sustainable Aviation Fuels (SAF) will comprise a portion of this growing output, which is being achieved through new renewable fuel refineries and the expansion of existing facilities.Importantly, the expected production has a wide geographic footprint covering North America, Europe and Asia Pacific.IATA counts more than 130 relevant renewable fuel projects announced by more than 85 producers across 30 countries. Each of these projects has either announced the intent or commitment to produce SAF within their wider product slate of renewable fuels. Typically, there is a three to five year lag between a project announcement and its commercialisation date. This implies that further renewable fuel capacity out until 2030 could still be announced over the following years.“The expected production increase is extremely encouraging. Seeing this, we need governments to act to ensure that SAF gets its fair production share. That means, in the first instance, production incentives, to support aviation’s energy transition. And we need continued approval for more diversification of methods and feedstocks available for SAF production.”IATA’s Director General Willie Walsh said, “With these two measures successfully in place, we can be confident that the expected 2028 production levels will be realistically aligned with our recently published roadmaps to net zero carbon emissions by 2050. That is important as we are counting on SAF to provide about 62% of the carbon mitigation needed in 2050.”Trends supporting this optimistic outlook are already visible. In 2022, SAF production tripled to some 300 million litres (240,000 tonnes) and project announcements for potential SAF producers are rapidly growing.If renewable energy production reaches 69bn litres by 2028 as estimated, the trajectory to 100bn litres (80mn tonnes) by 2030 would be on track. If just 30% of that produced SAF, the industry could achieve 30bn litres (24mn tonnes) of SAF production by 2030.“Achieving the necessary SAF percentage output from these new and expanding facilities is not a given. But with governments the world over agreeing at ICAO to a long-term aspirational goal (LTAG) of net zero by 2050, they now share accountability for aviation’s decarbonisation. That means establishing a policy framework to ensure that aviation gets the needed share of renewable energy production in SAF,” said Walsh.The case for diversification, within current sustainability criteria, is clear. At present, it is expected that 85% of future SAF volume over the next five years will be derived from just one of nine certified pathways, being Hydrotreated Esters and Fatty Acids (HEFA), which is dependent on limited availability of feedstock such as waste fat, oil and grease feedstocks (FOGs, recognised by industry as second-generation feedstock).A recent IATA survey revealed significant public support for SAF. Some 85% of travellers agreed that governments should provide incentives for airlines to use SAF.“People have experienced governments’ role in the transition to green energy for electricity. They now expect it for SAF. The G7 leaders are among the latest to reiterate their understanding that SAF is critical for sustainable aviation. Now they must support their declarations with effective policies.“To promote SAF production, there are many tried and tested tools including tax credits, grants, or even direct investments in emerging technologies and solutions. The market is there. Airlines want to purchase SAF. Anything to meaningfully incentivise SAF production will be a step forward,” Walsh added.

Istanbul: The Middle Eastern carriers are expected to post a net profit of $2bn this year, driven by network rebuilding, IATA has said in a report.According to IATA Director General Willie Walsh, the Middle East carriers have been swiftly rebuilding their international networks and in March 2023, while the region’s international connectivity has returned to 98% of its pre-Covid level.The region’s return to profitability in 2022 (estimated at $1.4bn) was supported by a significant increase in the passenger load factor of almost 25 percentage points, outstripping the performance of the other regions.Airline industry is en route to a profitable, safe, efficient, and sustainable future, Walsh said on Monday and noted that with $803bn of revenues, airline net profits are expected to reach $9.8bn in net profit this year.The estimated net profit this year is more than double the previous forecast of $4.7bn in December 2022.Some 4.35bn people are expected to travel in 2023, which is closing in on the 4.54bn who flew in 2019.Cargo volumes are expected to be 57.8mn tonnes, which has slipped below the 61.5mn tonnes carried in 2019 with a sharp slowing of international trade volumes.“Resilience is the story of the day and there are many good reasons for optimism. Achieving profitability at an industry level after the depths of the Covid-19 crisis opens up much potential for airlines to reward investors, fund sustainability, and invest in efficiencies to connect the world even more effectively. That’s a big ‘to do’ list to achieve with just a 1.2% net profit margin. That’s why we call on governments to keep their focus on initiatives that will strengthen safe, sustainable, efficient, and profitable connectivity,” Walsh noted.He said priorities for 2023 include sustainable aviation fuel (SAF) production incentives to accelerate progress toward net zero carbon emissions, ensuring the integrity of CORSIA as the economic measure applied to international aviation, eliminating inefficiencies in air traffic management and applying global standards consistently.“Passengers are counting on a safe, sustainable, efficient and profitable airline industry. A recent IATA poll of travellers in 11 global markets revealed that 81% of those surveyed emerged from the pandemic with a greater appreciation of the freedom that flying makes possible,” Walsh added.

Istanbul: The airline industry’s biggest focus is on sustainable aviation fuel (SAF), which will be the biggest contributor to net zero success, IATA director general Willie Walsh said here Monday.International Air Transport Association recently unveiled a series of roadmaps aimed at providing step-by-step detailing of critical actions and dependencies for aviation to achieve net zero carbon emissions by 2050.These roadmaps address aircraft technology, energy infrastructure, operations, finance, and policy considerations leading to net zero.Walsh noted, ‘SAF production is less than 0.1% of what we need for net zero. But the trend is positive. In 2022, SAF production tripled to 300mn litres. And while critics of our industry dismiss that figure as irrelevant, it’s important to remember that airlines used every single drop costing almost $350mn.“With the right supportive policies, reaching 30bn litres by 2030 is challenging but achievable. That would be about 6% of the 450bn litres annual production capacity we need in 2050. We think it will be the tipping point because achieving it will establish the trajectory needed to scale up for 2050.”On why the airline industry was not moving faster on the issue, he said, “The willingness of airlines to use SAF is definitely not the issue. As I have said, every drop of SAF ever produced has been purchased and used. The problem is insufficient production capacity to meet demand.“That’s why we must increase the number of pathways for SAF production and diversify feedstocks — of course while maintaining their sustainability credentials. Doing so will open production opportunities best suited to particular geographical locations.”Governments, he said should be jumping over themselves to be first in line for the job creation, local economic stimulus, and biodiversity protection that SAF production brings — significant benefits for both developed and developing economies alike.“Unfortunately, the politicians have not made good on their COP26 promise to stop financing fossil fuels. We have not seen a major shift of fossil fuel subsidies to green energy — certainly not for SAF.”The US approach to SAF is the most advanced with a system of tax credits to drive up production levels. This will be more effective than purchase mandates being considered as far and wide as Singapore, India and Europe. When there is not enough supply, a purchase mandate will drive prices up, stall innovation and limit competition long before supply increases.And if there is an early policy decision that is needed, it is to establish global standards for a SAF book and claim system that can fairly allocate SAF credits with no double counting, he noted.Just as location makes no difference on the impact of CO2 emissions, it has no impact on where SAF is uplifted and used either. A global approach to book and claim for SAF credits will help facilitate economies of scale in SAF production.And it will avoid the long-distance shipping (or even importation) of SAF, which would only degrade its climate credentials.Walsh added, “It is important that we get these basics of energy transition done — production incentives, more diversified production pathways and a book and claim system. Our commitment to net zero by 2050 is fixed and firm. We have the roadmaps for an energy transition. Now we need these tools to get the job done!”

Istanbul: The International Air Transport Association (IATA) and the United Nations Environment Programme (UNEP) have signed a memorandum of understanding (MoU) aligned with the UN 2030 Agenda for Sustainable Development to address sustainability challenges in the aviation industry.Reduction of problematic single use plastics products (SUPP) and improving the circularity in the use of plastics by the industry is the initial focus of the partnership as UNEP leads global efforts to develop an international legally binding instrument on plastic pollution, including in the marine environment, by the end of 2024.Making aircraft cabins more sustainable is a priority for airlines and their passengers. The complex and asymmetrical regulatory environment, however, often poses an obstacle by preventing circular economy best practices. In the absence of a global approach, differing regulations at both ends of a journey severely limit the actions that airlines can take.IATA advocates for a simplified and harmonised regulatory environment that would enable a reduction in plastic utilisation and greater reuse, and recycling of cabin waste, including plastics, where they are needed.To this end, the partnership will step up IATA’s engagement with UNEP to ensure that aviation’s unique challenges and opportunities are represented in the upcoming international legally binding agreement to end plastic pollution.Already, IATA and UNEP are working on joint guidance on Re-thinking Plastics in Aviation. This comprehensive resource will encompass an overview of regulations, guidance on SUPP replacement, and recommended best practices for both industry and regulators.“World Environment Day reminds us that sustainability is our number one global challenge. Formalising IATA’s longstanding collaboration with UNEP will help airlines move even faster on improving the sustainability of the aircraft cabin. It’s critical that we achieve a harmonised global regulatory framework to enable airlines to implement more comprehensive and common circular economic solutions in all markets.“For example, currently our hands are tied with outdated regulations focused on incineration rather than reuse and recycling. Modernising that will be a big step forward for sustainability,” said Marie Owens Thomsen, IATA’s senior vice-president (Sustainability) and chief economist.“UNEP is looking forward to working with IATA, to helping the industry transition to net zero, reduce food waste and move away from SUPP. The aviation industry can also help by raising awareness among passengers and staff, and ensure that all stakeholders of the aviation value chain are engaged, and most importantly act in a joined-up way to end plastic pollution,” said Sheila Aggarwal-Khan, director, UNEP’s Industry and Economy Division.More than 400mn tonnes of plastic is produced every year, half of which is designed to be used only once. Of that, only 9% is recycled, with the pollution it generates making it extremely urgent that global action is taken.Under this partnership, IATA and UNEP also plan to work together on knowledge sharing, guidance and networking in other key sustainability challenges including sustainable aviation fuel (SAF), sustainable finance, climate adaptation, biodiversity conservation including preventing wildlife trafficking and sustainable tourism.

Istanbul: The International Air Transport Association (IATA) released a new analysis showing that reported unruly passenger incidents increased in 2022 compared to 2021.IATA called for more states to take the necessary authority to prosecute passengers under Montreal Protocol 2014 (MP14).Latest figures show that there was one unruly incident reported for every 568 flights in 2022, up from one per 835 flights in 2021. The most common categorisations of incidents in 2022 were non-compliance, verbal abuse and intoxication.Physical abuse incidents remain very rare, but these had an alarming increase of 61% over 2021, occurring once every 17,200 flights.“The increasing trend of unruly passenger incidents is worrying. Passengers and crew are entitled to a safe and hassle-free experience on board. For that, passengers must comply with crew instructions. While our professional crews are well trained to manage unruly passenger scenarios, it is unacceptable that rules in place for everyone’s safety are disobeyed by a small but persistent minority of passengers. There is no excuse for not following the instructions of the crew,” said Conrad Clifford, IATA’s deputy director general.Although non-compliance incidents initially fell after the mask mandates were removed on most flights, the frequency began to rise again throughout 2022 and ended the year some 37% up on 2021.The most common examples of non-compliance were: smoking of cigarettes, e-cigarettes, vapes and puff devices in the cabin or lavatories; failure to fasten seatbelts when instructed; exceeding the carry-on baggage allowance or failing to store baggage when required; and consumption of own alcohol on board.A two-pillar strategy focusing on regulation and guidance to prevent and de-escalate incidents is in place for the needed zero-tolerance approach to unruly behaviour, Clifford noted.“In the face of rising unruly incident numbers, governments and the industry are taking more serious measures to prevent unruly passenger incidents. States are ratifying MP14 and reviewing enforcement measures, sending a clear message of deterrence by showing that they are ready to prosecute unruly behaviour. For the industry’s part, there is greater collaboration.“For example, as the vast majority of intoxication incidents occur from alcohol consumed prior to the flight, the support of airport bars and restaurants to ensure the responsible consumption of alcohol is particularly important.“No one wants to stop people having a good time when they go on holiday, but we all have a responsibility to behave with respect for other passengers and the crew. For the sake of the majority, we make no apology for seeking to crack down on the bad behaviour of a tiny number of travellers who can make a flight very uncomfortable for everyone else,” Clifford added.

Istanbul: Airline industry is en route to a profitable, safe, efficient, and sustainable future, the International Air Transport Association (IATA) Director General Willie Walsh said and noted that with $803bn of revenues, airline net profits are expected to reach $9.8bn in net profit this year.The estimated net profit this year is more than double the previous forecast of $4.7bn in December 2022. In his report to the 79th IATA Annual General Meeting here Monday, Walsh said global air passenger traffic is currently more than 90% of 2019 levels.Some 4.35bn people are expected to travel in 2023, which is closing in on the 4.54bn who flew in 2019. Cargo volumes are expected to be 57.8mn tonnes, which has slipped below the 61.5mn tonnes carried in 2019 with a sharp slowing of international trade volumes.Total revenues are expected to grow 9.7% year over year to $803bn. This is the first time that industry revenues will top the $800bn mark since 2019 ($838bn). Expense growth is expected to be contained to an 8.1% annual increase.“Airports are busier, hotel occupancy is rising, local economies are reviving, and the airline industry has moved into profitability. The pandemic years are behind us, and borders are open as normal. Despite economic uncertainties, people are flying to reconnect, explore, and do business.Walsh said: “Airline financial performance in 2023 is beating expectations. Stronger profitability is supported by several positive developments. China lifted Covid-19 restrictions earlier in the year than anticipated. Cargo revenues remain above pre-pandemic levels even though volumes have not. And, on the cost side, there is some relief. Jet fuel prices, although still high, have moderated over the first half of the year“Margins are, however, wafer thin. With $803bn of revenues, airlines will share $9.8bn in net profit this year. Put another way, airlines will make, on average, $2.25 per passenger. So, the value retained by airlines for the average plane trip won’t even buy a subway ticket in New York City.“Clearly that level of profitability is not sustainable. But considering we lost $76 per passenger in 2020, the velocity of the recovery is strong,” Walsh noted.The IATA chief, however, insisted “challenges remain.” He said: “Inflation continues, cost pressure is acute, and in some areas, labor is in short supply. Unfortunately, many of those we do business with are adding to these pressures.”On safety, Walsh said: “We can also be impressed by the industry’s safety record. This year marks 20 years of the IATA Operational Safety Audit (IOSA). In September 2003, Qatar Airways was the first to join the IOSA registry. Today, over 400 airlines are on the registry. It is the global standard for managing operational safety.“More importantly, it is clear that IOSA helps to improve safety. In 2022, IOSA registered carriers outperformed those not on the registry by a factor of four. It is never ‘job done’ on safety. So, we are marking two decades of success by making IOSA even more effective with a transition to a risk-based approach.“Of course, IOSA is not the only global standard improving safety. We prevent future accidents by learning from accident reports. But, of the 214 accidents in the last five years, only 96 final accident reports are available. This is an inexcusable violation of the Chicago Convention and a disservice to the safety of our passengers and crew. Governments and their agencies must improve.”As an industry connecting people and goods across jurisdictions, global standards are at the core of airlines’ success—starting with safety and permeating everything they do.For example, Walsh noted: “Consumers the world over appreciate the ability to purchase air travel in a single currency for any destination in absolute confidence. That’s achieved with the global standard processes of the IATA Financial Settlement Systems. With half a century of experience and global scale, they are cost effective, safe and reliable. And we are constantly evolving them to deliver the value you expect.”

Istanbul: Global aviation industry’s blocked funds have increased by 47% to $2.27bn in April this year from $1.55bn in April 2022, International Air Transport Association (IATA) announced here Sunday.IATA, which is holding its three-day Annual General Meeting here, warned that rapidly rising levels of blocked funds are a threat to airline connectivity in the affected markets.The top five countries account for 68% of blocked funds. These countries are; Nigeria ($812.2mn), Bangladesh ($214.1mn), Algeria ($196.3mn), Pakistan ($188.2mn) and Lebanon ($141.2mn).IATA director general Willie Walsh said: “Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets. Governments need to work with industry to resolve this situation so airlines can continue to provide the connectivity that is vital to driving economic activity and job creation.”IATA, the global body of more than 300 member airlines, urged governments to abide by international agreements and treaty obligations to enable airlines to repatriate these funds arising from the sale of tickets, cargo space, and other activities.Airlines incur unnecessary costs when they are unable to repatriate their overseas sales funds, freely or in a time-bound manner, industry analysts say.Typically, such costs occur when airlines' funds are forced to sit idle in foreign bank accounts as a result of foreign exchange shortages or regulatory obstacles put in place by certain governments.By blocking airline funds from ticket sales, various countries are depriving the aviation industry of the much-needed cash, in contravention of bilateral agreements and global standards.Holding back money belonging to airlines also discourages other carriers from serving the particular market, thereby reducing connectivity and options for passengers.For airlines, this can lead to cash flow problems, reduced profitability, operational difficulties, reduced investment and reputation damage.Blocked funds can cause significant cash flow problems for airlines, as they may not be able to access funds that are owed to them. This can impact their ability to pay for fuel, salaries, and other essential expenses, which could ultimately lead to financial difficulties and even bankruptcy.When funds are blocked, airlines may have to accept lower profits or even losses on their international routes. This is because they may be forced to sell tickets in local currency and then hold onto that currency until they can access it, which can result in exchange rate losses.These can also make it difficult for airlines to operate effectively. For example, they may be unable to pay their suppliers or service providers, which could impact their ability to maintain their aircraft, provide in-flight services, or even pay for landing fees and other airport charges.Trapped funds can discourage airlines from investing in new routes or expanding their operations in certain countries. This can limit the growth potential of airlines and may lead to missed business opportunities.

Air passenger numbers in the Middle East will double to 550mn by 2040, International Air Transport Association (IATA) regional vice-president (Middle East) Kamil al-Awadhi said Sunday.GCC carriers will continue to drive the Middle Eastern growth, al-Awadhi told Gulf Times in Istanbul.However, IATA did not provide a breakup of the projected passenger numbers in the GCC region during the review period.Al-Awadhi also said the Middle Eastern carriers, particularly, those based in energy-rich GCC, are looking increasingly at sustainable aviation fuel (SAF) because of their focus on environment.But, he admitted, that there was not enough SAF in the market to meet the growing needs of airlines.“Airlines cannot do much about it; they don’t produce SAF,” al-Awadhi noted.Recently, Qatar Airways signed a deal with Shell to source 3,000 metric tonnes of neat SAF at Amsterdam Schiphol airport. It encompasses the existing jet fuel contract with Shell at Amsterdam which will now see Qatar Airways using at least a 5% SAF blend over the contract period for the fiscal year 2023-2024.Qatar Airways' bilateral agreement with Shell is part of a wider effort initiated by the oneworld alliance, which has set the target of using SAF for 10% of combined fuel volumes by 2030.Qatar Airways is the first carrier in the Middle East and Africa to procure a large SAF amount in Europe beyond government mandates. SAF offers significant potential for decarbonisation as the neat fuel can reduce full lifecycle emissions by up to 80% compared to conventional jet fuel.This means that Qatar Airways will be reducing its emissions on flights from Amsterdam by approximately 7,500 tonnes of CO2 for the fiscal year.Meanwhile, IATA’s latest data indicate Middle Eastern airlines posted a 38% traffic increase in April this year compared to a year ago. Capacity climbed 27.8% and load factor rose 5.6 percentage points to 76.2%.On the cargo side, Middle Eastern carriers experienced a 6.8% year-on-year decrease in volumes in April this year. This was a slight decline in cargo sector performance compared to the previous month (-5.5%). Cargo capacity increased 10.0% compared to April 2022.Middle East will be one of world’s fastest-growing aviation markets in the next decade, according to management consulting firm OliverWyman.In a recent report, OliverWyman noted the Middle East remains among the fastest-growing aviation markets in the world, with the regional fleet set to expand 5.1% annually over the next decade. The maintenance, repair, and overhaul (MRO) sector will grow at a compound annual growth rate (CAGR) of 4.9% during the same period.The Middle East aviation market is heavily dependent on international travel, which has been slower to rebound to pre-pandemic levels than domestic travel. However, last year the region benefitted from air traffic around events such as the World Cup, which was held in Qatar in the final two months of the year.The Middle East’s share of the global fleet will grow over the decade from 4.9% in 2023 to 6% in 2033. Meanwhile, the global fleet is projected to expand one-third by 2033, to well over 36,000 aircraft, with Oliver Wyman also anticipating a record number of aircraft deliveries over the next 10 years (despite current supply chain constraints).The Middle East fleet’s growth over the next decade will primarily be driven by the addition of narrow bodies. Historically, the Middle Eastern fleet has been primarily made up of wide bodies.But moving forward, narrow bodies will increase to 48% of the fleet from 39%, while wide bodies will decline to 48% from 56%, OliverWyman said.

Long-term investments in the Qatar Stock Exchange (QSE) are rewarding, according to Shahnawaz Rashid, Commercial Bank executive general manager and head of retail banking. “If you look at the last 15 years of Qatar Stock Exchange growth in terms of capital appreciation, on an average, the QSE has given 15% to 17% returns, if you stay invested for 15 years. On the other hand, S&P and some of the other global indices are 8% to 9%, which means QSE has substantially outperformed others,” Rashid told Gulf Times on the sidelines of a Commercial Bank seminar in Doha recently. Rashid said: “The other good thing about the Qatar Stock Exchange is that the dividend yield in the QSE is ‘very steady’. All these blue chip companies on the QSE give 4% to 6% every year. They also encourage their investors to stay for a longer period of time.” Talking about Commercial Bank Financial Services, which provides customers with a secure platform for trading on QSE-listed stocks, bonds & T–bills, Rashid noted: “We are among the top brokerage houses in Qatar. We have almost QR800mn of capital base. So that is the kind of investment our Board has put into CB Financial Services. “And if you look at our volumes in the last five years, it has grown between eight and 10 times in terms of the local market. Today, 50% of our volumes are coming through our award-winning, feature-packed mobile application.” He said: “Commercial Bank's strategy is to give our customers a world-class and customised experience. One of the reasons why we have these lounges in Commercial Bank is that we want customers to come and have a discussion with us. And after proper risk profiling of the customers, we offer them the products that are suitable for them, depending on their age, the size of the family and income.” He said: “Commercial Bank Financial Services is our brokerage arm, where we do trading, margin financing and asset management. And in Sadara lounges, we do wealth management products like international shares trading, mutual funds, structured notes, bonds etc. We give customers a variety of products and services.” Speaking about Commercial Bank’s recent seminar on ‘Investment Opportunities in Qatar’s Stock Market: New Products and Insights on the Local Economy’, Rashid said: “This event is in partnership with the Qatar Stock Exchange. And we wanted to educate and talk really about various products that are there in the market. “Commercial Bank continues to put its customers at the heart of everything we do. This forum not only aimed at providing insightful information to our customers, but also to provided a unique space for them to engage directly with market experts and our top executives.” “Our CB Premium Lounges serve as a vital gateway for our premium customers to explore and capitalize on the best local investment opportunities, which cements our targeted focus to provide world-class banking services like no other, keeping our customers aware and well-informed about the best investment opportunities,” Rashid added. The Commercial Bank seminar held at its D-Ring Road branch was hosted by Reham Sabri, assistant general manager and senior director (Premium Banking) at Commercial Bank. The event featured two distinguished speakers from the Qatar Stock Exchange: Samer Abo-Zaghla, education manager, and Abdulrahman al-Sayed, director (Strategy and Investment).

QatarEnergy will sign liquefied natural gas (LNG) supply deals with European customers likely after the summer, HE the Minister of State for Energy Affairs, Saad bin Sherida al-Kaabi said on Thursday.“Agreements with several European destinations... are very close to being finalised,” he said at a media event at the QatarEnergy headquarters on Thursday.Replying to a question by Gulf Times, al-Kaabi said, “We are talking to many companies in different countries. We are in advanced discussions with some customers. If I put everything that we have on the table and assume that we are going to be successful in signing everything that we are negotiating today, a big portion of it will be going to Asia, the other will be going to Europe and we will be more than sold out as far as volumes of North Field East (NFE) and the North Field South (NFS) are concerned.”QatarEnergy’s LNG trading arm, QatarEnergy Trading, yesterday entered into a long-term LNG Sale and Purchase Agreement (SPA) with Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) to supply up to 1.8mn tonnes per year (MTPY) of LNG to Bangladesh for 15 years, starting in 2026.The gas would come from the ongoing North Field expansion, which seeks to enhance the country's liquefied natural gas (LNG) production capacity from 77 MTPY to 126 MTPY by 2026 or 2027.North Field expansion comprises the North Field East (NFE) and the North Field South (NFS) expansion projects and is the industry’s largest ever LNG project.Al-Kaabi reiterated Qatar’s commitment to honouring its contracts and said, “Until now we have not defaulted even on one cargo. We will honour our contracts fully and it is very important for us as an LNG producer and exporter. These supply arrangements reinforce our unwavering dedication to safeguarding the energy security of valued customers".”He noted, “Today, we are proud to be the largest LNG supplier to Bangladesh and Petrobangla by a large margin, delivering more than 3.5mn tonnes per year from Qatar to Bangladesh. These supply arrangements reinforce our unwavering dedication to safeguarding the energy security of valued customers like Bangladesh and delivering the reliable energy they require for socio-economic development and prosperity.”

QatarEnergy’s LNG trading arm, QatarEnergy Trading, has entered into a long-term LNG Sale and Purchase Agreement (SPA) with Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) to supply up to 1.8mn tonnes per year (MTPY) of LNG to Bangladesh for 15 years, starting in 2026. The SPA signing at QatarEnergy’s headquarters in Doha was witnessed by HE the Minister of State for Energy Affairs, Saad Sherida al-Kaabi, also the President and CEO of QatarEnergy, and Nasrul Hamid, Bangladesh’s State Minister for Power, Energy, and Mineral Resources on Thursday. The gas would come from the ongoing North Field expansion, which seeks to enhance the country's liquefied natural gas (LNG) production capacity from 77mn tonnes per year to 126Mtpy by 2026 or 2027. North Field expansion comprises the North Field East (NFE) and the North Field South (NFS) expansion projects and is the industry’s largest ever LNG project. The project is unique in that it is characterised by the highest health, safety, and environmental standards, including carbon capture and sequestration, to reduce the project’s overall carbon footprint to the lowest levels possible. North Field expansion is a "strategic" step in cementing Qatar's position as the leading LNG producer and it will play a major role in meeting the increasing global demand for LNG. It is also in line with Qatar's long-term vision to develop the country's natural resources. In his remarks during the signing ceremony, al-Kaabi said, “Today, we are proud to be the largest LNG supplier to Bangladesh and Petrobangla by a large margin, delivering more than 3.5mn tons per year from Qatar to Bangladesh. These supply arrangements reinforce our unwavering dedication to safeguarding the energy security of valued customers like Bangladesh and delivering the reliable energy they require for socio-economic development and prosperity.” Concluding his remarks, al-Kaabi thanked the working teams from both sides for their dedicated work to reach this agreement, adding: “I would also like to express our gratitude to His Highness the Amir, Sheikh Tamim bin Hamad al-Thani for his wise leadership and continued guidance to and support of the energy sector.” Al-Kaabi told Gulf Times that “a majority of supplies from NFE and NFS would go to Asia and with the rest likely to go to European customers. We are in advanced discussions with some customers. We will be more than sold out as far as NFE and NFS are concerned.” Hamid said Bangladesh attached top priority to liquefied natural gas and LNG imports from Qatar to meet his country’s growing energy needs. “LNG will have a significant component in our energy mix as we seeks to boost supplies to our industries, textile sector in particular, Hamid said in reply to a question by Gulf Times at a media event at QatarEnergy’s headquarters on Thursday. Qatar currently delivers more than 3.5mn tons per year of LNG to Bangladesh. With this new SPA, QatarEnergy reaffirms its position as the LNG supplier of choice for its partners in the South Asia LNG markets. Qatar will add 65mn tonnes per year of LNG to meet the growing needs of the world from its North Field expansion and its project in the United States, al-Kaabi said at the recently concluded Qatar Economic Forum in Doha.

The Covid-19 pandemic severely impacted the travel and tourism sector, leading to disruptions, job losses, and economic challenges.However, as the world recovers from the pandemic, the sector is expected to regain its significance and contribute to global economic recovery and growth.According to global tourism body, World Travel & Tourism Council (WTTC), nearly half of the 185 countries will have either fully recovered to pre-pandemic levels or be within 95% of full recovery by the end of 2023.In 2023, the sector is forecast to reach $9.5tn, just 5% below 2019 pre-pandemic levels when travel was at its highest. Some 34 countries have already exceeded the 2019 levels.The recovery will speed up this year as Chinese travellers re-enter the market, WTTC noted in a research paper recently. The decision by the Chinese government to reopen its borders from early this year will propel the sector and see it recover to pre-pandemic levels in 2023 and beyond.According to the research conducted by WTTC in collaboration with Oxford Economics, the global tourism body also forecasts that the sector will recover to 95% of the 2019 job level.Travel and tourism provides 300mn jobs worldwide, the global tourism body says.Over the next 10 years, the global tourism body is forecasting that the sector will grow its GDP contribution to $15.5tn by 2033 representing 11.6% of the global economy.By 2033, the sector will employ 430mn people around the world, with almost 12% of the working population employed in the sector.Last year, despite the economic and geopolitical difficulties, the travel and tourism sector’s recovery continued at pace, growing 22% year-on-year to reach $7.7tn.This recovery represented 7.6% of the global economy in 2022, the highest sector contribution since 2019, although its global GDP is still 22.9% behind its 2019 peak.In 2021 the global sector grew 24.7% year-on-year, and last year it grew a further 22% to reach a GDP contribution of $7.7tn.The research shows that the ongoing conflict in Ukraine and prolonged travel restrictions imposed by a number of countries such as China had a significant impact on the global recovery. But the recent decision by the Chinese government to reopen its borders will propel the sector and see it recover to pre-pandemic levels next year.From a pre-pandemic high of more than 334mn, the Covid-19 pandemic ravaged employment in the sector which saw losses of more than 70mn to bring the total number employed in 2020 to just 264mn.Following the recovery of 11mn jobs in 2021, the sector created 21.6mn new jobs in 2022 to reach more than 295mn globally – one in 11 jobs worldwide.Spending from overseas visitors grew by a record 82% to reach $1.1tn in 2022, showing that international travel is firmly back on track.WTTC President & CEO, Julia Simpson said: “The travel and tourism sector continues to recover at pace, demonstrating the resilience of the sector and the enduring desire to travel.“By the end of the year, the sector’s contribution will be within touching distance of the 2019 peak. We expect 2024 to exceed 2019. Travel and tourism will be a growth sector over the next ten years.”The travel and tourism sector has a significant impact on the global economy, contributing to economic growth, job creation, foreign exchange earnings, and infrastructure development.It stimulates various sectors, such as hospitality, transportation, entertainment, and retail. As people travel, they spend money on accommodation, food, attractions, shopping, and transportation, generating revenue for businesses and governments.The travel and tourism segment is a major employer worldwide, creating direct and indirect employment opportunities in areas like hotels, restaurants, airlines, travel agencies, tour operators, transportation services, and tourist attractions.This obviously helps reduce unemployment rates and improve livelihoods, particularly in regions heavily dependent on tourism.The sector generates foreign exchange earnings through international tourism. When visitors from other countries spend money within a destination, it contributes to the local economy and helps balance trade deficits.Countries with attractive tourism offerings can benefit from a steady inflow of foreign currency, which supports economic stability and development.To accommodate tourists, destinations invest in infrastructure development, including airports, roads, hotels, restaurants, and recreational facilities. This leads to improvements in public services and creates a favourable environment for business and investment. Infrastructure development also benefits local communities and residents by enhancing their quality of life.According to industry analysts, the travel and tourism sector acts as a natural catalyst for other industries such as agriculture, manufacturing, and handicrafts.As tourism grows, it jacks up the demand for local products and services, thereby benefiting various sectors of global economy.Pratap John is Business Editor at Gulf Times. Twitter handle: @PratapJohn

Market correction is seen across all rental sectors of Qatar's property market, researcher ValuStrat said and noted rents continue to moderate in the country.In its first 2023 review of Qatar’s real estate market, ValuStrat noted that after witnessing sizeable rent growth last year, it has recorded “market correction” in all rental sectors of the property market in the country.Average leasing rates in the residential, office, and retail segments declined compared to fourth quarter (Q4) 2022.On the other hand, hotel average daily rates (ADRs) grew by 5% year-on-year (y-o-y). As a result, the ValuStrat Price Index (VPI), representing residential capital values, remained marginally stable.ValuStrat's general manager (Qatar) Pawel Banach commented: "With the advent of 2023, we are observing a new phase of the real estate market in Qatar. After hosting one of the most significant global sporting events,“Qatar is undergoing a period of adjustment. In all the sectors, there was a substantial expansion in terms of supply last year. Post-FIFA World Cup Qatar 2022, we have observed a fall in demand.“The increase in oversupply is contributing to pervasive market corrections. As the overall real estate sector evolves in 2023, we are projecting the downward adjustments to continue, and the extent of the fall will depend upon the expectations and actions of all involved public and private stakeholders."The VPI for Q1, 2023 remained broadly consistent, recording a marginal dip of 0.2% quarter-on-quarter (QoQ).Despite the minor quarterly decrease, the VPI saw a 0.3% annual rise at 65.1 points, corroborating stabilisation in the residential sales market.Regarding housing supply, an estimated 1,500 units were added during Q1, 2023, increasing residential stock to 336,440 units. Compared to Q4, 2022, median monthly rental rates declined to QR9,250, reflecting a 5.1% depreciation.While market corrections were expected after hosting the FIFA World Cup 2022 last quarter, the median asking rent in the residential market is still 3% higher y-o-y, ValuStrat noted.After a streak of quarterly increases in the villa sub-market during 2022, the median asking rent in the villa sub-market dropped by 3.1% QoQ.However, the median asking rents in apartment and villa markets remained higher than in Q1, 2022. It is also observed that the quarterly decline in leasing rates is higher in prime areas compared to secondary locations.On the commercial front, with the completion of 177,000sq m gross leasable area (GLA) of office space in Q1, 2023, office stock has reached 6.78mn sq m GLA. Approximately 500,000sq m GLA remains in the pipeline for 2023, with 85% of the new commercial supply expected in West Bay and Lusail.Despite the additional supply in the market, the citywide median monthly asking rent for offices recorded a quarterly dip of 1.4%, standing at QR70 per sq m.With the expansion of oversupply, rents for offices are projected to continue to decline significantly in secondary commercial districts, ValuStrat said.ValuStrat Qatar head (Research) Anum Hasan commented: "We are experiencing a period of decline, which might not be detrimental to the dynamics of the sector. Prices and rents are adjusted to correct the demand and supply gap.“Although we have observed the performance to vary amongst sub-asset classes, the extent of the decline is not consistent for all. The rental trend of the villa market is relatively more stable than the apartment market.“Fall in leasing rates are softening in secondary residential locations targeting low-income households. Grade-A offices are experiencing a slower rent decline than Grade B/C office projects. The underlying forces of supply and demand are in play in all markets."The organised retail sector experienced a minor growth in supply over the last quarter, with the total stock reaching 2.4mn sq m GLA, after the opening of Aventura Mall (11,000sq m GLA) in Ain Khaled.In terms of median monthly rent for shopping centres, rates softened slightly to QR200 per sq m, marking a 4.8% quarter-on-quarter (QoQ) and a 7% y-o-y decrease, respectively. Nevertheless, malls across Qatar experienced increased footfall due to tourism initiatives such as Shop Qatar 2023.Following the legacy of hosting the FIFA World Cup 2022, visitor numbers exceeded 1.1mn in Q1, 2023, marking a staggering 268% y-o-y surge.While the ADR experienced a 71% reduction to QR429 in the first two months of 2023, this quarterly decline was expected after rates skyrocketed to accommodate FIFA tourists last quarter.Notably, the ADR still reflects a 5% increase y-o-y, despite the surge in the supply of hotel rooms last year, ValuStrat said.

There is bound to be significant volatility and cyclicality within the crypto industry as it is still a relatively small market, noted Peter Smith, co-Founder & CEO, Blockchain.com.Speaking on the future of cryptocurrencies at ‘Qatar Economic Forum, Powered by Bloomberg’ on Thursday Smith said, “2023 has been largely positive for the industry. If you look at ‘year to date’ returns, the digital assets class would be the strongest performing asset class in the financial markets with about 45% on the year, so far.”He said it was worth discussing what happened to the crypto industry last year.“In the crypto industry, we experience an incredible cyclical market with a roughly four-year cycle. One of the reasons for its cyclicality is that it's still a relatively small market. If you combine the total value of all major cryptocurrencies in existence today, it amounts to approximately 0.6 times that of Apple.“Consequently, there is bound to be significant volatility and cyclicality within this market. What made 2022 unusual was the occurrence of numerous counterparty failures and company collapses within the crypto space, with one of the most notable examples being FTX (a company that formerly operated a cryptocurrency exchange and crypto hedge fund)."Smith noted, “2022 was the crypto version of the great financial crisis, but it turns out that without a federal bank to backstop, the impact was much more volatile. In crypto, there is no overnight window, and you are completely on your own.“This means that only the strongest players will survive. If you look at the 12 most valuable companies in crypto a year and a half ago, only four of us are still standing."Talking on growth markets, he noted, “The biggest growth we are seeing on the consumer side is ‘rest of world’ markets. We are growing very quickly in Nigeria, Ghana, Colombia, Argentina. We also grew a lot in Ukraine because we made our service entirely free in Ukraine. We have seen a lot of growth in these markets, which is mainly driven by stable points’ usage.”Smith said, “We are incredibly active in the institutional business today and have picked up a lot of market share over the last six to 12 months [primarily through consolidation].”He said, "One of the most robust price movements we witnessed this year was when US banks started failing. I believe that if the US government defaults, we will probably see a quick pullback and then a very strong upward push in the crypto market."“The trend has been positive for crypto globally. We have gotten closer and closer to regulatory certainty. Crypto in the US has now become a bit of a political issue, because there are a few people in the Democratic Party who have certain views on it.Within the US you have the SCC, which is probably what people refer to as being hostile, then you have state regulators, who are very collaborative, you have the CFTC, that is very collaborative, the Treasury is a collaborative regulator, so the US is very nuanced and complicated regulatory environment for financial services companies.Compared to Singapore, who has one central regulator, the US has some 57 regulators to regulate financial markets, so it is impossible to categorise whether they are hostile or friendly.”Smith added, “I would be genuinely concerned if there were fewer developers contributing to open-source crypto projects today compared to three years ago. In each cycle, we have observed a slight decline in the number of contributing developers, and it is something we closely monitor.“However, in this current cycle, we are actually experiencing growth in the developer community, even in 2022. As I mentioned earlier, the crypto industry is still relatively small today. If we aspire to be significant in the future, we need substantial development efforts. Without active contributors, our potential value in the future would be limited. Therefore, one of the most encouraging aspects of the crypto market today is the genuine growth and development of our community.”

Builder.ai, the AI-powered composable software platform, has announced an investment of over $250mn in a Series D funding led by the Qatar Investment Authority (QIA).The new funding takes the total amount raised by the company to over $450mn with an up to 1.8 times increase in its valuation.The latest round of capital will fuel the company’s continued industry leadership and innovation pipeline allowing further investments in talent, partnerships, and technology; with a bigger focus on using human conversation as the primary user interface for allowing people to build software rather than the expert-laden white-canvas systems we are used to seeing in the no-code/low-code space.With customer demand at an all-time high, and AI advancing every day, the company has almost doubled its headcount since January 2022, and extended its UK HQ footprint with four new offices opened since 2021 – including the USA, the UAE, Singapore, and France.Continued investor support – combined with strategic partnerships, customer tailwinds and acclaimed industry innovation – helped drive the company’s momentum with 2.3 times revenue growth and over 40,000 features deployed to customers within the last year.The Series D round included participation from additional existing and new investors including Iconiq Capital, Jungle Ventures & Insight Partners.“Builder.ai was founded on the promise that everyone should be empowered to unlock their human potential. Today this means being able to build software to be able to do more with less. We are entering an incredible time in history where the very notion of software is changing; from something that had a shelf life of years to what will eventually have a shelf life of a conversation and the volume of what is being created is only going to grow exponentially” said Sachin Dev Duggal, chief wizard and founder of Builder.ai.Duggal added “With the support of our investors and the dedication and drive of our team, we are further empowered to unlock our own potential. Our growth strategy has always been driven by a DNA based on being able to do more with less and this has weaved into our shared vision with our customers around the world as everyone pushes the envelope to do more.“It is what attracted our first-round investors in 2018, and what drives this Series D today. Our team is already investing this capital in our AI and automation capabilities, not only keeping pace with the fast-moving industry, but leading from the front so we can empower our customers more and at the same time use new frontier technology responsibly.”Ahmed Ali al-Hammadi, CIO for Europe, Turkiye and Russia at QIA noted, “QIA is very excited to be partnering with the leader in this space. We are confident that Builder.ai’s innovative technology and proven approach positions the company for a future of substantial growth. This investment is aligned with QIA’s strategy of supporting innovative companies shaping the future of the global economy.”

Middle East sovereign funds have revolutionised capital and providing capital for all kinds of different projects, investments, funds and co-investments, noted Stephen A Schwarzman, chairman, CEO, and co-founder of Blackstone.He was speaking at a panel session on ‘A new global growth story’ at the Qatar Economic Forum, powered by Bloomberg and joined by Francine Lacqua, anchor, Bloomberg Television.On Middle Eastern sovereign funds reshaping private equity: “I started coming to the Middle East in 1991 and a lot of the countries have just started funds, and now the Middle East sovereign funds have revolutionised capital and providing capital for all kinds of different projects, investments, funds and co-investments.“It is one of the most vital parts of the world because the amount of money that needs to go into the individual countries is less than the amount of income that keeps increasing the scale of the funds. There is an enormous professionalisation of the investment process over the last 30 years.”Schwarzman said: “Capital is still flowing, trade has been affected, and there is the start of capital flows being affected. I think that is a negative for the global economy, and I think everyone is concerned about that and even geopolitically, muscular politics can only go so far before it starts creating very adversarial types of relationships, which are not good for any country.”On the world economy, inflation, fragmentation, and its relationship with deal-making Schwarzman said: “We are already seeing activity in Europe in real estate for example, because people become sellers, given the dramatic increase in interest rates and financial institutions wanting to provide less leverage. The owners of assets have become structural sellers to reduce their leverage, so we are already seeing terrific opportunities there, and it’s just a matter of time before that happens in other places in the world.”