Business FRIDAY, SEPTEMBER 20, 2013
Singapore Airlines, Tata to establish new carrier SINGAPORE: Singapore Airlines and India’s Tata conglomerate are to establish a new full-service carrier based in New Delhi, the two firms said in a joint statement yesterday. Singapore Airlines (SIA) and Tata Sons have signed a memorandum of understanding and applied for government approval to set up the new airline, the statement said.
The establishment of a new airline “will help further stimulate demand for air travel”, it said, adding it will be subject to regulatory approvals including from India’s foreign investment promotion board. The new carrier “will be based in New Delhi and will operate under the full-service model”, the statement said. Tata Sons will own 51 percent of the
carrier and SIA will hold 49 percent. “We have always been a strong believer in the growth potential of India’s aviation sector and are excited about the opportunity to partner Tata Sons in contributing to the future expansion of the market,” said SIA chief executive Goh Choon Phong. “Tata Sons is one of the most established and respected names in India. With
the recent liberalisation, the time is right to jointly bring consumers a fresh new option for full-service air travel,” he added. Prasad Menon, chairman of the proposed new carrier, said: “It is Tata Sons’ evaluation that civil aviation in India offers sustainable growth potential. “We now have the opportunity to launch a worldclass full-service airline in India.” — AFP
Iraq’s 5-year plan seeks to diversify economy Violence, political feuds hamper projects
KARACHI: Pakistani stockbrokers watch the index share price board during a trading session at the Karachi Stock Exchange (KSE) in Karachi yesterday. The benchmark KSE100 index was 23303.65, increase 373.59 points in middle of the day’s session. —AFP
World stocks rally after Fed keeps stimulus intact LONDON: Global stock markets soared yesterday, especially in emerging economies, as investors welcomed the US Federal Reserve’s surprise decision to keep its vast stimulus policy unchanged. The Fed confounded market expectations overnight with its decision to refrain from tapering its $85-billion-a-month bond-buying program, unleashing a worldwide equities rally led by emerging markets. “With tapering seen as all but certain, frenzy ensued last night when... the Fed held back, causing markets to soar,” said Spreadex trader Alex Conroy. “This move by the Fed comes as a shock to investors who had positioned themselves and effectively accepted that Chairman (Ben) Bernanke would start the reduction.” European stock markets joined the global rally yesterday after the Fed decision fuelled a buying spree on Wall Street that sent the Dow Jones Industrial Average up 0.95 percent and the S&P 500 up 1.22 percent-with both closing at record highs. London’s benchmark FTSE 100 index of top companies climbed 1.44 percent, Frankfurt’s DAX 30 gained 1.16 percent to push further into record territory and the CAC 40 in Paris rose 1.15 percent to levels last seen only before the global financial crisis began. The European single currency raced to $1.3569 — the highest level since early February. It later stood at $1.3561 in late-morning trade, up from $1.3516 late in New York on Wednesday. The stock market gains in Europe followed an Asian rally led by under-pressure developing economies, which breathed a sigh of relief after suffering a heavy sell-off in August as investors bet on the Fed tightening its monetary policy. After news the Fed would hold off scaling back quantitative easing, or QE, Manila jumped 2.81 percent, Jakarta 5.05 percent, Mumbai 3.33 percent and Bangkok 3.66 percent in value. In Tokyo, the Nikkei rose 1.80 percent. Hong Kong added 1.67 percent and Sydney rallied 1.10 percent to finish at a five-year high. Emerging economies have suffered a huge outflow of cash since Bernanke hinted in May that the Fed would begin tapering its bond-buying scheme, which had led to a spurt of investment abroad in search of higher returns than in the United States. “Ben Bernanke had threatened to take away the punchbowl and bring the QE-party to an end. But he’s changed his mind... and told us all to party on,” said Societe Generale fixed income strategist Kit Juckes. “Emerging Markets is the asset class which suffered most from the ‘taper talk’ and is the one which is bouncing most as the removal of stimulus is delayed.” The Fed decision sent the South African rand climbing to 9.62 to the dollar, up about 8 percent from a low point set last month. South Africa’s JSE Top 40 index rose 2.45 percent to 39,782.3 points in midday trade. —AFP
BAGHDAD: Iraq’s government has released a five-year economic plan which will try to diversify beyond oil production and develop the industrial sector. The plan, announced this week, faces major obstacles including a rising level of sectarian violence and political infighting within the country’s fractious coalition government. But if implemented, it could mark a new stage in Iraq’s recovery from decades of war and international economic sanctions. So far, the recovery since the US invasion of 2003 has been based almost entirely on rising oil production. “The government made a decision to focus on other sources in the country instead of oil, so the new plan will basically focus on industry instead of oil,” said Hussain Al-Shahristani, deputy prime minister for energy affairs. The plan for the years 2013 to 2017 calls for investment of approximately $357 billion in development projects across
the country, focusing in particular on five sectors: building and services, agriculture, education, transport and communications, and energy. About 79 percent of that investment total would come from the government and the rest from the private sector. Oil would remain by far the biggest source of revenue for the government during this period. Revenues from oil in the five years are projected at 768.7 trillion dinars ($662 billion), with revenues from non-oil sources at 43.5 trillion dinars. Production of crude oil is envisioned rising from 3.2 million barrels per day in 2012 to 9.5 million bpd in 2017, with crude oil exports climbing from 2.6 million bpd to 6 million bpd in 2017, assuming an average oil price of $85 per barrel over the five years. Many analysts think such targets may be much too optimistic, given logistical bottlenecks and the damage which the sectarian violence is doing to oil production and
government operations. Iraq aims to increase its storage capacity for crude oil for export from 10.987 million barrels to 30.057 million barrels in 2017. The five-year plan also envisages increases in agricultural production to reduce Iraq’s dependence on grain imports. “The plan aims to produce about six million tons of wheat in 2017 which will cover the domestic consumption, and to raise the average production of barley from 820,000 tons in 2011 to 1.2 million tons in 2017,” said Sami Matti, technical deputy minister at the ministry of planning. He said Iraq’s total production under the plan would rise by an average of 13 percent annually, while the country’s poverty rate would fall from 19 percent in 2012 to 16 percent in 2017. The government also hopes the plan will help to reduce economic disparities between rural and urban areas. — Reuters
Lufthansa adds 34 Boeing, 25 Airbus jets to fleet FRANKFURT: Lufthansa, Germany’s biggest airline, said yesterday it has placed orders for 59 new fuel-efficient long-haul aircraft worth a total list price of 14 billion euros ($19 billion). Lufthansa said in a statement it has ordered 34 new Boeing 777-9X jets and 25 Airbus A350-900 to renew its fleet. The order - described by Lufthansa as the single largest investment ever made by a private investor in Germany - will build a fleet of more fuel-efficient aircraft to combat high oil prices. “With these aircraft, we make a quantum leap in terms of efficiency,” chief executive Christoph Franz told a news conference. Delivery is scheduled from 2016, the company said. The new aeroplanes would primarily serve to replace existing aircraft at Lufthansa, with older Boeing 747-400s and Airbus A340-300s to be phased out by 2025, Franz explained. “This investment will safeguard about 13,000 jobs at Lufthansa alone as well as thousands of jobs at our partners in aviation and other suppliers,” he said. Lufthansa currently operates a wide-body fleet of around 107 aircraft, among them 10 ultra-modern Airbus A380s and nine
Boeing 747-8s as well as the Airbus A330300. The fleet also includes Airbus A340s and Boeing 747-400s. “The aim is to reduce the number of different models and fleet complexity and also replace existing aircraft with state-ofthe-art aeroplanes,” Franz said. Following an order already placed in March of this year, Lufthansa currently has a total of 295
brand-new aircraft on order with a list value of 36 billion euros. “These should be delivered by 2025,” he said. In Seattle, Boeing issued a statement saying it was “delighted” by Lufthansa’s choice of its 777-9X jet, which is expected to be launched later this year and come into service “around the end of the decade”. —AFP
MUNICH: Lufthansa airplanes are parked at the international airport in Munich, southern Germany. — AP