A sign of the global downturn came with Singapore Airlines’ announcement that it was asking its 2,400 captains to volunteer for unpaid leave. It seems that the carrier continues to struggle after declaring a 69% drop in annual Net Profit last March. Long haul travel demand has weakened as passengers’ disposable income has declined. Compare this to the ME carriers which saw a 10.5% November increase in passenger loads – compared to the global growth of 4.6%.

Meanwhile Emirates go from strength to strength with the opening of its new purpose-built A380 terminal costing US$ 3 billion. Covering an area of 528k sq mt on 11 levels, it has 20 gates that will be utilised to manage traffic from the 31 jumbos already operating and the further 59 on order. The facility has the capacity to cope with 15 million passengers. Recently Emirates President has indicated that he would, in principle, buy a further 40 of these aircraft but for lack of room at the burgeoning airport.

As one of FIFA’s biggest sponsors, Emirates’ eight year US$ 195 million agreement runs out after the 2014 World Cup. This week, the airline indicated that it was satisfied that the world governing body was doing its best to rid itself of internal shenanigans and that as far it was concerned the brand was not being tarnished because of this association.  (An August blog – A Sign of the Times –  cited that Jose Havelange, IOC member from 1963 – 2011 and former FIFA president , was a beneficiary of bribes from ISL, a company granted exclusive marketing and TV rights for the 2002 and 2006 FIFA World Cups. It was revealed that Havelange and his cohort and ex son-in-law, Ricardo Teixeira, received at least US$ 1.5 million and US$12.6 million respectively).

One of Dubai’s older shopping centres is undergoing major renovation over the next eighteen months. Burjuman will see its retail space increase a further 20% to reach 1 million sq ft and will add a new Carrefour hypermarket, a cinema multiplex and a doubling of its food court.

On the subject of food, the largest Cheesecake Factory in the world has opened in MoE. As Dubai and most of the developed countries are becoming increasingly obese this is just what the doctor ordered! Market analysts expect the UAE restaurant market to surge 30% to US$ 780 million by 2015 and there is no surprise in the news that American brands account for 47% of all food and beverage outlets in Dubai malls.

Fairmont the Palm became the first of many new hotels to be opened in 2013. Located on Palm Jumeirah’s trunk, the 5-star property, costing US$ 330 million with 380 rooms and 460 metres of beachfront is part of a project that also includes a further 560 luxury apartments. The Fairmont will be seen as a premium location and will have room rates at the top end of the market – well in excess of the October average room rate of US$ 476 for beachfront hotels.

A recent report showed that the UAE currently has over 20k hotel rooms under construction at 2012 year end. Latest figures (October 2012) indicate a 17.3% jump in Dubai’s hotels’ RevPAR and a 5% spike in occupancy rates.

Despite the optimism in this sector, there are still some projects on hold including the likes of Jumeirah Hotel in DMC, the Creek’s Palazzo Versace and the Palm’s Oceana and Royal Amway hotels.

January is traditionally a great month for the emirate’s hotels which will be further boosted by the DSF and numerous exhibitions. This month alone, Dubai World Trade Centre expects at least 150,000 trade visitors attending the likes of Arab Health, the world’s second largest health care exhibition, Arabplast, Tekno Tube Arabia, Intersec and Aircraft Interiors ME. February and March will see larger exhibitions with even more visitors boosting the local economy. It is estimated that the DWTC adds almost US$ 1.8 billion to the Dubai purse, accounting for 2.1% of its GDP.

The emirate’s largest private developer, Damac, is offering prospective customers “free” Audi cars if units are purchased during the Dubai Shopping Festival. Penthouse buyers will be entitled to an R8 (valued at US$ 136k) with A8s, A6s and A4s on offer for 3, 2 and I bedroom apartments respectively.

The second phase of the government’s US$ 380 million Barsha housing project has been completed on time. This is part of HH Sheikh Mohammed bin Rashid  Al Maktoum’s initiative  to ensure that all his citizens live in a secure and comfortable environment. With almost 80% of the work now finished, the final completion is slated for September 2014.

Two of the bigger Dubai-based contractors, Brookfield Multiplex and Arabtec, were awarded major contracts. The former was on the receiving end of Emaar’s new 72-srorey, Address Hotel, with 200 rooms and 523 serviced apartments. At 370 metres, it will become the second tallest structure in Dubai when completed in 2015. The Canadian company – with an Australian background – has already built several iconic landmarks including Emirates Towers, the Standard Chartered Gate Building and DIFC Gate Building as well as several Marina developments. Arabtec were awarded a US$ 650 million contract for the Jean Nouvel- designed Louvre Abu Dhabi.

Nakheel is slowly extricating itself from its financial mess arising from its “cloud-building” exercises pre GFC. This week it issued a US$ 33 million Islamic bond, being the third tranche of a sukuk that is part of its August 2011 US$ 16 billion restructuring plan. There is still plenty of work to be done to return the developer to some form of financial normality.

DEWA expect to spend a little more this year with expenditure up under 2% to US$ 3.76 billion. 90% of the spend (US$ 3.4 billion) will be operational expenditure that will help maintain electricity and water production capacity higher than the 2012 levels of 9,646 MW and 470 MIGD respectively. To pay for some of these projects, as well as to refinance existing debt, the utility provider is planning a Q1 Islamic bond issue in the region of US$ 1 billion.

Another Dubai entity seeking additional finance is Emirates Islamic Bank (EIB). The bank’s capital base will be raised to US$ 1 billion as it issues 1.5 billion Dhs 1 shares with a rights issue.

It seems likely that the Islamic home finance provider, Tamweel, will be taken over by Dubai Islamic Bank who already hold 58.2% of the shares. The offer price would see 18 Tamweel shares being swapped for 10 DIB scrip with shares in the former valued at US$ 0.61 and the latter at US$ 0.34.

The local bourse has started the year on fire with a YTD 6.24% rise in the first ten days of 2013; on the week it is 3.66% up having ended the Thursday session on 1756 and a massive 31.03% over the past 52 weeks.

Another indicator on the growing strength of the local economy was Germany’s BMW’s announcing a record 21,300 vehicles being sold to ME customers in 2012. Of this total, the UAE accounts for nearly 50% of the market with sales in excess of 10k units.

Although the German car industry is ticking over, it seems that country may be edging closer to a recession with the latest quarterly results the worst in four years. There is no doubt that Germany is being dragged down by its poorer  eurozone partners. Unemployment rates in the bloc rose to their highest ever level of 11.8% or 18 million. Worse still was the youth unemployment rates in places like Spain and Greece where they currently stand at 56.1% and 57.6%!

The UK’s economy has yet to recover the level it was at four years ago, pre GFC, and there are distinct possibilities of a triple dip recession in 2013. Eurozone’s PIGS all have debts as a percentage of GDP ratios of over 100% whilst the UK’s 86.3% is a worrying sign. Japan fares even worse with a rate of 212% – second  in the world behind Zimbabwe!  It is no surprise that, with Prime Minister Shinzo Abe facing general elections in July, the government has introduced a US$ 110 billion stimulus package  in a belated attempt to end deflation and boost growth.

It can only be Dubai with Starbucks’ announcement that it had opened a 24 hour drive in on Beach Road for its customers. It proves that the coffee chain is making life less taxing for its patrons just as it does for itself in the UK. This is their 103^rd opening in the UAE – a country that drinks the equivalent of 3.5 kg of coffee annually – twice as much as any other GCC nation. One More Cup of Coffee for the thirsty Dubai populace.