In only its fourth year of operations, it seems that flydubai will be make an even bigger profit than the US$ 41.4 million made for the year ending 30 June 2012. Last year, the carrier saw passenger traffic at over 5.1 million accounting for 8.9% of all traffic at Dubai International. It now services 57 destinations and has a fleet of 29 Boeing 737s – with a remaining 23 on order for delivery before 2015. With such a rapid expansion, the airline is expected to make a substantial order – for either 737 Max or Airbus A320 neo – at this year’s Dubai Air Show in November.

On the aviation front, dnata has just acquired the remaining 50% in the Italian in-flight caterer, Servair Airchef. The company, part of the Emirates Group, will now have a presence at all the major Italian airports, providing more than 40k daily meals.

Tourism continues to be a major driver in the country’s economic recovery. The UN World Tourism Organisation’s latest report shows that the UAE was ranked 31 in the world for international tourism receipts raking in about US$ 10 billion out of a global total of US$ 1.04 trillion.

It is estimated that over 4% (or 400k) of all visitors to Dubai arrive by means of a cruise liner and this figure is set to grow in the coming years that might bring in US$ 270 million by 2015 and contribute up to 5% to Dubai’s GDP. This week saw the maiden call of the Royal Caribbean’s “Mariner of the Seas”, which can host over 3,800 passengers.

Another tourist attraction is taking shape in the Ilyas & Mustafa Galadari development, City of Arabia. The brothers plan to open a new four-zone 1.5 million sq ft theme park – IMG Worlds of Adventure – which will be the world’s largest indoor facility and be based on Marvel comic characters from Cartoon Network.

The influx of tourists is a huge boost for the retail sector with the emirate now ranked the second most important global retail destination after London. The recent CBRE report puts the likes of New York, Paris and Moscow behind Dubai. With twenty five new retail brands entering the local market in 2012, it  ranks as the world’s fourth “hottest” retail market.

The MAF Group spent US$ 680 million this week to purchase the remaining 25% minority share to gain full ownership of the French hypermarket Carrefour’s regional franchise, located in 19 countries. The company is looking at a further capital investment of up to US$ 1 billion this year.

After some considerable time, the stalled Lagoons project on Dubai Creek is back with confirmation that Dubai Holding is going to proceed with a JV – Emaar probably being the likely partner. The original US$ 17.4 billion plan was initially launched in April 2006 by Sama Dubai before that developer, along with Dubai Properties and Tamweer, came under the auspices of Dubai Holding in August 2009. The seven island development will have residential, retail and commercial property with unconfirmed reports of a tower bigger than Burj Khalifa.

Having recently announced three major developments in Dubai, Damac Properties have now begun construction of a 25-storey furnished apartment building in Baghdad. It is their first foray into the Iraqi market with the US$ 100 million Princess Tower due to be handed over in 2016.

Also overseas, Dubai-based Drake & Scull has been awarded a US$ 459 million Saudi contract to complete the Lamar Towers in Jeddah. The twin towers – with a total built up area of 410k sq mt – is expected to be ready in two years. DSI recently announced Q1 creditable results with Revenue and Profit up to US$ 334 million and US$ 17 million repectively.

Meanwhile Arabtec Terma, a 60:40 venture between the Dubai-based contractor and Greece’s Terma, has won a US$ 108 million bid to build a hospital in Riyadh. The six-storey, 105-bed hospital will be completed within two years. Saudi is becoming an important revenue stream for Arabtec and is a big contributor to its current backlog valued at US$ 5.7 billion.

Intermetal, the largest banquet and outdoor furniture company in the country, is planning to build a US$ 20.4 million facility in Dubai Investment Park. Costing US$ 20.4 million, the 300k sq ft factory will help this Group Harwal Company maintain its current 80% of the local market.

Starting the week at an impressive 2296 points, the Dubai Financial Market Index managed to hang on to its recent gains and was trading at the same level at close of trading on Thursday. There is no doubt that most global equity markets have seen growth (not necessarily at the same rate of Dubai) but there are indications that this may be coming to a shuddering halt as the train comes off the track.

Latest figures from the Ministry of Finance, for the first nine months of 2012, show a 14.4% hike in foreign trade to US$ 213.5 billion with imports jumping 12.6% to US$ 134.9 billion.  Total foreign trade for last year is expected to come in at around US$ 295 billion which would represent a 17% annual increase on the previous year.

However, there is a note of caution for 2013. The IMF is predicting that the robust growth of 5.7% seen in the region last year may slow to 3.2% this year. The obvious reason is that the global economic malaise will impact on oil production, the demand for which will fall. Despite this drop in the energy sector, non-oil growth will keep going on the same track at around 4.5%.

Not so good news this week for two Australians, Matt Joyce and Angus Reed. Both were found guilty by the Ruler’s Court on property fraud, charges involving Australian developer Sunland, over a multi-million Nakheel project. In addition, Joyce, the former GM of Dubai Waterfront, was fined US$ 25 million for his alleged role in the US$ 14 million fraud.

Although there are still embargoes on some of Zimbabwe’s diamond trade, it seems that up to a half of their exports of US$ 865 million will come through Dubai; most of which will then be re-exported to the likes of India, Belgium and China. The Robert Mugabe nation has had previous problems with “blood diamonds” but restrictions have been lifted for most sites with the exception of Marange.

Three major driving forces in the local economy are planning new loan deals. Atlantis, The Palm, owned by Istithmar and still managed by Kerzner International Resorts, is raising US$ 850 million for both refinancing existing debt and for new funding. Commercial Bank of Dubai, 20% owned by the Investment Corporation of Dubai, is launching a US$ 500 million five-year bond issue, the proceeds of which will be used for general corporate business. Emirates NBD launched a Tier1 US$ 1 billion bond with a 5.75% yield; Tier 1 capital represents the bank’s core capital introduced under the Basel Banking industry regulations.

Despite some worries about whether Dubai will meet its debt obligations over the next three years, the IMF has no such qualms. The estimated repayments are in the region of US$ 48 million and represent almost 100% of the emirate’s GDP. Officials have strategies in place, including the possibility of asset sales and debt rescheduling, to ensure that this does not become a major problem.

The global financial scandals continue unabated. This time the Hong Kong Mercantile Exchange – which deals mainly in gold and silver future contracts – is under investigation by local authorities for “serious suspected irregularities”.

In addition to its economic woes – including no growth and high unemployment – it is estimated that the EU loses a massive US$ 1.3 trillion a year to tax evasion. The main offenders are multinationals (such as Apple, Google, Starbucks and Amazon), rich individuals and parasitical tax havens including Andorra, Liechtenstein, Monaco, San Marino and Switzerland.

Clouds are appearing on the Australian economic landscape as its currency continues to fall (almost 7% so far in May) and the stock market takes a battering, losing US$ 33 billion in Thursday’s trading. External factors, including a surprise contraction in Chinese manufacturing and the almost inevitable prospect of QE being phased out in the US, have not helped the Australian cause. According to a recent report, commodity price volatility accounted for a US$ 25.6 billion fall in 2012 earnings across the country’s once booming resources sector.

Last week, Treasurer Wayne Swan announced a US$ 19.4 billion budget deficit and a US$ 43 billion four-year public spending cut. Although the country escaped the worst of the GFC, consumer confidence has now plummeted with car sales being one sector hit badly.

With its costs double that of Europe and quadruple of Asia, as well as its employees earning twice as much as their US counterparts, Ford has decided to close its two Australian plants after an 88-year presence. The American company has also made losses of US$ 580 million over the past five years, When one also considers that the three main manufacturers – Ford, GM and Toyota – now sell less than half the vehicles than they did in 1970, and that the state governments have poured in US$ 11.6 billion in subsidies since 2003, the local industry is obviously commercially unviable. Furthermore at the beginning of May, the Australian dollar was 29% higher against the Japanese yen compared to a year earlier.

Ford is a good example of the need for the country to stimulate its competitiveness on the global stage. Australia will also need to take measures to revive its ailing tourism and retail sectors. For a country that has not seen a recession for 21 years, has grown 13% since the GFC (whilst most other countries have gone backwards) and has an enviable unemployment rate of 5.5%, some analysts are now asking What’s Up?