LAING O'ROURKE WORKED ON THE ATLANTIS HOTEL IN DUBAI

Construction company Laing O’Rourke has dismissed speculation suggesting its Middle East operation will close.

In an emailed statement to Business 24/7, a spokesperson for the British business said: “Laing O’Rourke is not closing its Middle East operations.”

Quoting an unnamed source, trade website building.co.uk reported over the weekend that Laing O’Rourke was cutting its global workforce from 35,753 to 20,000.

“It’s been a nightmare for my family and hundreds of former colleagues who are out of work,” the source told the website. “The firm can’t employ more than 4,500 workers and 900 professional staff in the Middle East now, which is down from about 16,000 and 5,000 during the boom – a fall of about three-quarters.”

The report added that Laing O’Rourke’s downsizing would affect its south Asian operations.

But the company insisted on Monday that speculation concerning the closure of its Middle East operation was false.

Laing O’Rourke is the UK’s third largest contractor, with operations in the Middle East since 2006. It worked on the Atlantis hotel in Dubai and doubled its turnover for the Middle East to $225 million last year.

Middle East aviation is expected to post a $100 million profit for 2010, its first revenue surge since 2005, according to an industry body.

A turnaround from its previous $400 million loss forecast for this year, the International Air Transport Authority (IATA) said on Monday that local carriers would register financial growth.

“This is significantly better than the previously forecast $400 million loss and the $600 million that the region’s carriers lost in 2009,” IATA said.

“GDP growth of 4.3per cent is outstripping the global average and Gulf carriers continue to gain market share through their hubs for Europe to Asia-Pacific traffic even as capacity is being added at a more cautious rate.”

Airlines globally are expected to register a $2.5bn profit this year, a significant improvement from IATA’s previous forecast in March of a $2.8bn loss.

The aviation body attributed the industry’s rosier financial outlook to a surprisingly swift recovery from the economic downturn. Strong traffic, a rise in premium travel and more stabilised oil prices were also factors, IATA added.

Global traffic this year is set to grow 7.1 per cent and 18.5 per cent on the passenger and cargo sides respectively, according to IATA. Meanwhile, yields are expected to increase 4.5 per cent across both segments, and load factors should rise 10.2 per cent as more aircraft comes online.

Europe is the only region expected to suffer a deficit during this period, with a $2.8bn loss predicted. The region was hit hard by the ash cloud incident arising from a volcanic eruption in Iceland this April that led to 100,000 flight cancellations.

Despite forecasting a profit rise in global aviation, IATA sounded a note of caution for airlines.

“The $2.5 billion profit comes with some important health warnings. First, this represents a net margin of just 0.5 per cent, which is a long way from sustainable profitability. Second, a major part of the global industry is still posting big losses,” said Giovanni Bisignani, IATA’s director general and CEO.

“The industry is fragile,” Bisignani added. “The challenge to build a healthy industry requires even greater alignment of governments, labour, and industry partners. They must all understand that this industry needs to continue to reduce costs, gain efficiencies and be able to re-structure itself if it is to be sustainably profitable. We must all be prepared for a greater change.”

Its exposure to the Dubai World debt restructuring has not altered Standard Chartered’s aim to double revenues in the Middle East to $4bn by 2015, according to a senior executive.

V. Shankar, chief executive for Europe, the Middle East, Africa and Americas, admitted to Zawya Dow Jones that confidence was rocked when state-owned investment vehicle Dubai World revealed its restructuring plans last November.

“People were concerned by the level of Dubai debt. In a normal world economic environment this would be OK but in the context of the post-Lehman world they got hit by global headwinds,” he said.

But Shankar insisted that Standard Chartered, one of seven creditors negotiating with Dubai World on its $23.5bn debt restructure, would not delay its expansion plans.

“We’re a long-term player in these markets,” Shankar told Zawya. “We have risk appetite for the region.”

More than 90 per cent of the bank’s revenue comes from Africa, Asia and the Middle East.

Standard Chartered is believed to be well-protected against any losses, despite its high exposure to the Dubai World restructuring.

The Booz & Co research covered hospitals across the region, finding that healthcare in general faces several unprecedented challenges in these areas over the coming years.

A labour shortage of healthcare professionals is highlighted as the number one concern. This fits with the findings of a separate study conducted recently by the Health Authority of Abu Dhabi (HAAD). This estimated the capital would need up to 102 per cent more doctors during the next decade, with the number needing to rise from 5,300 to as many as 10,700. The number of nurses will also need to rise by as much as 101 per cent, from 6,900 to 13,900.

According to Ali Hashemi, principal at Booz & Company, a focus on strategic positioning, medical service delivery and shared services will aid hospitals in overcoming these difficulties.

The Booz & Company report advises that providers shift their focus from simply administering treatment to holistically managing each patients’ care. In building the ‘hospital of the future’, changing healthcare demands, capacity constraints and the competitive environment need to be taken into account, the study recommends.

Chief executives in Middle East more likely to leave their jobs last year than counterparts from other regions, a new report reveals.

More chief executives were replaced in the Middle East last year than most other regions, a new report has found.

In 2009, the turnover for CEOs in this region was 16.4 per cent compared to 14.3 per cent globally, according to Booz & Company’s tenth annual CEO Succession Study.

“There are two contradictory dynamics that serve as precursors to this turnover,” the management consultancy’s report said. “Researches have shown that CEOs’ restructuring plans were triggered by the world recession after years of economic boom.

“However, more former CEOs are stepping into other business roles, due to the rapid growth and development that the Middle East region is experiencing.”

While global succession rates remained generally high last year, the number of sackings fell to 3.3 per cent after holding steady at 5.1 per cent for ten years up to 2008.

The financial services industry was the most volatile for CEO turnover last year, accounting for 17.2 per cent of chief executive departures. Of that number, 5.3 per cent were forced to leave.

In contrast, healthcare CEOs enjoyed the most stability with a 10.3 per cent turnover and only 0.6 per cent forced departure rate.

Premium demand picking up as IATA increases region’s 2010 deficit projection.

Airline chiefs in the Middle East have had a bittersweet week. It started badly when International Air Transport Association (IATA) increased the loss projection for local carriers in 2010 to $400 million.

Only three months ago, the airline representative said Middle Eastern fliers would register a $300 million deficit this year. So what has happened since December? IATA believes competition from airlines in other regions during that time has hit local revenues.

“Middle East carriers are expected to experience demand growth of 15.2% in 2010, but… low yields in long-haul markets connected over Middle East hubs is a burden on profitability,” an IATA statement said.

Even amid an economic downturn, airline chiefs have continued increasing their respective fleets and launching more routes. And yet the cost of expansion has not been reflected in higher profits. Not helping matters is the fact that with global demand for air travel still below levels seen before the financial crisis, Middle East carriers cannot realistically increase ticket prices.

While an unwelcome revelation for airline chiefs, the deficit forecast has at least been offset by some more positive news. On Thursday, a UAE daily reported that Middle Eastern airlines’ premium ticket sales for flights to the Far East and Australasia were up 25% in January compared to the same period last year.

Internal flights and services to other regions, such as Asia and Europe, had also risen. “It now looks as though the recession in premium travel has been cyclical rather than a permanent fall,” IATA said in a report. “Economy travel is also likely to be benefiting from the return of business travel.”

Taking everything into account, airline CEOs shouldn’t be too despondent about the increased loss projection for 2010. When times are tough, airline ticket demand usually declines as people limit their travel spend. Naturally, this leads to a huge drop in revenue across the industry. But Middle East carriers have fared better than most, mainly because the region stands as a mid-way point between east and west. That, coupled with rising demand for premium travel, should give local airline chiefs reason for optimism in the months ahead.

A projected rise in revenues coupled with the arrival of several big names in the region points to a buoyant outlook for the Middle East’s media industry.

With hundreds of journalists thrown on the unemployment scrap heap in 2009, last year was an undeniably tough period for Middle East media professionals.

In particular, UAE media outlets and publishing companies were forced to carry out mass culls as the economic downturn hit advertising budgets and revenues. No one working in the industry seemed safe from the dreaded axe during a period of financial instability.

But that was then. After enduring a turbulent year, the UAE media sector is showing signs of recovery that will make last year’s troubles seem like a minor blip in the grand scheme of things. A recent study by global management consultancy Booz & Co predicts the media and entertainment industry’s revenues will nearly double to US$2.7bn between last year and 2013. In contrast, the US market is expected to grow just 5% during the same period.

“The Middle East, along with certain other emerging markets, are the only markets where traditional and digital media are expected to grow,” Jayant Bhargava, a principal at Booz & Company, told a UAE newspaper.

Whether he’s right remains to be seen, but the arrival of major news corporations suggests the Middle East has much to offer. The BBC, Yahoo, CNN, Eurosport and Sky News have launched offices here, with News Corp chairman Rupert Murdoch pinpointing the region as a key area of growth for his media empire.

Last month, News Corp announced it was buying a 9.09% stake in Rotana, the Middle Eastern music and entertainment group based in Saudi Arabia, for $70 million. Hot on the heels of that deal, Murdoch is planning to make Abu Dhabi the regional hub for Fox International Channels, a subsidiary of News Corp. Doing so will establish the UAE capital as the control centre for the network’s satellite television broadcast, online advertising sales and documentary production operations.

The 82-year-old media mogul also wants to set up a high-definition 3D production office, shift the broadcast of 10 to 12 Fox channels in the Middle East from Hong Kong to Abu Dhabi, and create more Internet-based Arabic content.

When big hitters like Murdoch start building on foundations already laid in the region it’s time to sit up and take notice. His reputation as a captain of industry with an astute eye for growing and emerging markets is well established. As such, Murdoch’s decision to ramp up Fox operations in this part of the world suggests the good times are heading back to the Middle East media industry. And that will come as welcome news to the many professionals struggling to find new work since losing their jobs in 2009.

With airlines slashing fares for short-haul flights, Middle East and Asia travel has never been more popular.

UAE residents are snapping up cheap short-haul flights to tourist hotspots in the Middle East and Asia like never before, with Sri Lanka the latest destination to register a spike in travel.

Arrivals into Sri Lanka’s capital Colombo from the UAE jumped 164 per cent in January compared to the same period last year, according to figures from the Middle East office of the Sri Lanka Tourism Promotion Board (SLTPB).

“Judging by these early results, destination Sri Lanka is on track to surpass figures attained last year where tourist arrivals saw a double-digit growth,” said Heba Al Ghais Al Mansoori, Middle East Director of SLTPB based in Dubai.

Overall, Middle East tourist arrivals to Sri Lanka surged 50 per cent in January, with Saudi Arabia (up by 127 per cent), Qatar (171 per cent and Kuwait (up by 135 per cent) also reporting high growth rates.

Underpinning this trend is the rise of the UAE low-cost carriers, which has seen Flydubai and Air Arabia offer fares to cities within a four-hour flight for a few hundred dirhams return.

Sri Lanka’s increasing popularity is also down to the recent end to the country’s civil war, which stifled tourism for decades.

Air Arabia is offering fares to Colombo starting at Dh405.

Flydubai has a sale offering customers a 40 per cent discount on flights to or from Dubai between 1 March and 31 May if they book before 21 February. It does not fly to Colombo.

Anecdotal evidence suggests that more UAE residents, especially expats, are now flying smart rather than far, capitalising on the UAE’s location to take a weekend break on a budget.

For example, the cost of a return flight to Beirut could come up to the price of an evening meal at a restaurant for two in Dubai.