All in a good cause

Singapore Airlines is to auction off most of the 480 seats on the maiden flight of its new A380, the first commercial flight for the Airbus super-jumbo. The auction will be held on eBay in October and one-third of the revenues will go to charities.

Well done, Singapore Airlines. The charities make good money, the flight creates the feel of a global event, and the airline generates plenty of favorable publicity. Everybody’s a winner.

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Still the place to be

Hidden costs to business may hamper Dubai’s ability to thrive, says a story in today’s Gulf News. The new municipality fee on property, health care, and the Salik toll are helping dilute the benefits of tax-free living, says Eckart Woertz, economist at the Gulf Research Centre.

The paper goes on to say that rising rents, warehousing, education and foodstuffs are seriously jeopardizing Dubai’s prospects. “And with the possibility of a value added tax being introduced, the situation can further deteriorate,” says Woertz, now clearly into his stride.

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CEOs don't grow on trees

If one thing is certain it is that we’ll never be certain why Andre Dose resigned as CEO of Gulf Air. Clashes with the board, disagreements over management style, intrusive external audits…many theories are mentioned, the only truth is that Gulf Air is once again looking for a new chief.

There are few good times to have a CEO quit, but this looks like particularly one. Qatar Airways is going great guns, Emirates is sailing on serenely, and Etihad, helmed by former Gulf Air boss James Hogan, is stepping up. In comparison Gulf Air, with one rebranding and several restructuring plans under its belt, looks dead on its feet.

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Not every loser wins

Emirates has been among the most prolific sponsors of world sport in the last decade. Football, golf, rugby (league and union), sailing, Australian Rules, horse racing and cricket have all been touched by the Fly Emirates tag. Some estimates put the spend at $200m, and that was before the $195m splurged on sponsoring the next two football world cups.

The airline has earned a reputation for picking winners. Critics snipe it has more success buying winners.

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Turning a corner

General Motors is having to recall hundreds of Chevrolet Aveo cars in the UAE. The company says it needs to fix a fault that can cause the fuel line to crack in the event of a front-end collision.

Local distributors say the defect affects 1,488 units of certain 2007 model year Chevrolet Aveo sedans equipped with a 1.4-litre engine.

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Go Mena!

Sama Dubai isn’t the first Gulf company to invest in Tunisia, but it is currently the biggest. By some distance.

The property unit of government-owned Dubai Holding is to spend $14 billion creating a luxury real estate development north of the Tunisian capital. The 837 hectare development will include apartments, offices, trade centers and hotels. Local newspapers claim the deal could create 150,000 jobs, doubly good news in a country with a jobless rate of 14.3%.

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Chinese crackers

Starbucks has been turfed out of the Forbidden City. For some reason this will make lots of people happy, from tea drinkers to anti-globalists. More than 500,000 people signed up to an online petition complaining about the Seattle company’s presence at China’s number one tourist spot, and UNESCO world heritage site.

Why? Starbucks appears to have done nothing wrong, save for selling pricey coffee, and that’s no crime.

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Wanted: buyer with a plan

The Kuwaiti government wants to sell an 80% stake in loss-making national carrier Kuwait Airways, state news agency KUNA said earlier this week.

The news comes as Oman gets to grips with its own Oman Air and Bahrain takes on full responsibility for Gulf Air.

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Merger or train smash?

Everybody approves of the merger of National Bank of Dubai and Emirates Bank. Don’t they?

A new super-bank with assets of $44 billion, the biggest in the Gulf and now capable of challenging internationally, the merger of National Bank of Dubai and Emirates Bank is universally agreed to be a ’good thing’.

"It’s a very good move," says Karti Inamdar, banking analyst with Capital Intelligence, in the Gulf News. "I actually see plus-points all the way in a friendly merger of two healthy banks.”

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Brace yourselves

In the Spring of last year, Trends magazine canvassed the bosses of some of Dubai’s biggest real estate players to get some idea of where things were going in the property market. While mostly bullish – as you’d expect – two predicted a “softening” around February this year. Supply, they said, would finally catch up with demand, to an extent at least, and a correction could well be on the cards. Other analysts I spoke to were less optimistic. By October, according to some, a crash was imminent.

Well, February has come and gone, and there’s been nary a “correction,” never mind the kind of crash that your average hard-pressed (and non-property owning) expat has been hoping for. What’s happening? Was everyone mistaken? If the latest research is anything to go by, absolutely not. The supply-demand crunch has merely been subjected to the same thing that frustrates so many off-plan buyers in the region: construction delays. A correction is coming, and it could be a lot, lot bigger than anyone was expecting.

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Copycat killer

I have often complained vocally about the phenomenon known as “idea poaching,” when agencies steal ideas from one another. I was asked me to rant about this. Here I go.

The fact that I even have to talk about idea poaching is annoying in the extreme. This should be crystal clear to all parties concerned – agencies, advertisers and creatives. I don’t care if you have bi-polar disorder or if you’re taking Prozac suppositories: You know it when an idea didn’t come out of your own head. By deductive logic it must mean the idea belongs to someone else then. Get over it. And if you say the idea is yours, you are nothing by a leprous slag.

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When is a gift just a gift?

What may seem inappropriate in some cultures (being wined and dined by the agency, for example) is normal, if not expected, in others. It’s an especially touchy issue in the Middle East, where turning down a gift can be seen as a grave insult.

“I think it is a bit presumptuous for anyone to believe that an account will move because of lunch or dinner,” says Philip Jabbour, group director of marketing and new business development at Starcom Mediavest. The media buying agency says it doesn’t hand out gifts to clients or potential clients. “Such meals are casual, and at times necessary. What if a day meeting drags over lunch and you invite client for lunch?”

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Trouble at the diploma mill

Three years ago, Ron Bruder was building shopping malls in America. Now he’s in the Middle East, but as a developer of human capital, rather than retail centers. As founder and CEO of Education for Employment, an NGO aimed at boosting the skills of Middle East graduates, he believes graduates have been shortchanged by their colleges and universities.

“A lot of the countries that we’re operating in, there’s a disconnect between the level of education people get and the jobs that they don’t get. It’s an acknowledged disconnect, I’m not telling tales out of school. They go through four years of college and at the end of the day, the joke is they maybe get a bride from a better family, but they don’t get a job. We’re trying to change that,” he says.

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What lies beneath

Credit cards are an essential part of Gulf life, and not just to finance designer clothes and flashy watches. Some bills are practically impossible to pay unless you have the requisite plastic and thus, until the advent of proper debit cards, most wallets held at least one card bearing a Visa or MasterCard logo. These days banks offer credit cards to new customers as a matter of course, and that includes Islamic banks. Yet unlike their mainstream counterparts, Islamic banks, to their chagrin, must field awkward questions about what lies beneath the stamp of Shari’ah compliance. Read More

Safe landing

After 33 years of going nowhere, Gulf Air has made one safe landing that promises to reverse its fortunes. With Oman completely pulling out of the beleaguered airline at a dramatic extraordinary general assembly in May, Bahrain has regained its 100 percent ownership. Most believe the latest turn of events will help the kingdom redefine its priorities and establish itself as a tourism destination using Gulf Air as a catalyst. It’s a case of better late than never as the airline, by its own admission, was bleeding over $1 million a day and even more if other costs such as financing are included. Another estimate suggests that the carrier’s accumulated losses and costs, including for 2007, would amount to 254 million Bahraini dinars ($675 million). Gulf Air was founded in 1974 and was owned equally by the governments of Bahrain and Oman, after Qatar and Abu Dhabi withdrew in 2002 and 2005 respectively. Read More...

Wise move

Given that May was another bumper month for outlandish project announcements in Dubai – the truly gigantic shopping development at Dubailand, which will triple the emirate’s retail real estate, was the biggest – it was welcome indeed to see one new project that is not only grounded in reality, but in history too.

Pearls of Dubai, an initiative by the Dubai Multi-Commodities Center, isn’t going to set the precious stones world alight, but that’s precisely why it’s worth looking at it. It’s not the biggest and not the best project in Dubai, but it has something that is lacking in so many projects in this former pearl diving town: a smattering of authenticity. Read More...

Stalled

Salik, Dubai's first attempt at fixing its commuter traffic problem started today, and everyone in the emirate has an opinion on it. So what's Kipp's view?

First up, Day One cannot have been good for business productivity. There will have been a good number of people who bought the Salik card and enjoyed a clear run along the tolled Sheikh Zayed Road, perhaps most of them shaved a little time of their commute. For the majority, however, journey times increased dramatically; a straw poll in the Kipp office suggests commuting times tripled, many took over two hours on journeys that last week took 30 minutes. Read More...