November 2023

November 2023

NAVIGATING THE DIGITAL LANDSCAPE An Insightful Interview with Sunil Paul, Co-Founder & MD of Finesse

News, Reviews and Analysis.

November 2023

Elevating Private Aviation A MEA Business Publication

An Exclusive Interview with Paras P. Dhamecha, Managing Director Empire Aviation Group

Aviation Annual Gala Evening 6 | Dubai Airshow 8 | Technology Awards Winners 26 | IBM 36

Introduction

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he editorial staff of MEA Business are committed to reporting the as highlighting the business opportunities that already exist in the two regions.

We also want to provide a platform for business leaders to share ideas, engage in constructive debates and form strategic partnerships.

Our ultimate aim is to equip business leaders and professionals with the practical and tactical skills to thrive in the Middle East and Africa. With an emphasis on positive news stories, case studies and inspirational interviews, MEA business will inspire readers towards personal development and overall business success.

The magazine is arranged to provide clear and concise informative sections including news sections on the Middle East and Africa, CEO interviews and market updates. The magazine and news service we offer are available on a variety of platforms, these include our printed magazine, e-magazine, website and social media. Furthermore, we include augmented reality elements in some of our features to provide our readers with unparalleled coverage on the latest developments.

MA Business also publishes several sector specials throughout the year. These special issues are produced to coincide with important industry exhibitions and events. This month's issue is a Aviation special.

Kenneth Mitchen

Publisher, MEA Business

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CONTENTS 14

MIDDLE EAST NEWS

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The Aviation Annual Gala Evening is Back

DUBAI AIRSHOW

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Dubai Airshow 2023 unveils futurefocused conference agenda to shape new era for aerospace and defence

Airshow prepares for biggest event 10 Dubai on record and Shell Aviation sign 12 Emirates agreement for SAF supply at airline’s Dubai hub

COVER STORY Private Aviation: An Exclusive 14 Elevating Conversation with Paras P. Dhamecha, Managing Director of Empire Aviation Group

AVIATION FINANCE

18 Patches of Turbulence 22 Cleared for Take Off

MEA Business WEB: www.mea-biz.com EMAIL: info@cme-media.com PUBLISHED BY: Creative Middle East Media FZ LLE, 19th Floor, Creative Tower, Fujairah Creative City, PO Box 4422, Fujairah, UAE EXECUTIVE DIRECTOR AND PUBLISHER: Kenneth Mitchen Email: ken.mitchen@mea-finance.com

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Business News for the MEA region

DUBAI AIRSHOW

Airshow 2023 to showcase the 24 Dubai innovations carving a sustainable future

TECHNOLOGY ACHIEVEMENT AWARDS 2023

Business Technology Achievement 26 MEA Awards 2023 (Winners) 28 Event Highlights

PARTNER CONTENT

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Estate Income in the UAE – how it is 30 Real treated for corporate tax purposes

SAVINGS & INVESTMENTS

34 Providing Prosperity AI IN BANKING

36 Intelligence Quotient

18 28

24

34

36 mea-biz.com

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AVIATION ANNUAL GALA EVENING

The Aviation Annual Gala Evening is Back

14 November 2023

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he Aviation Annual Gala Evening (AAGE), the region’s leading invite only event for Senior Aviation will take place on the 14th November 2023. The event will again take place on an exclusive 220ft megayacht berthed outside Pier 7, Dubai Marina. The deluxe venue is lavishly designed with custom-built interiors and first-class amenities. Guests will enjoy an amazing cruise along Dubai’s shoreline, with captivating views of the famous Palm Island, the Dubai skyline and Iconic buildings such as the Burj Al Arab. Guests will also be entertained throughout the evening by a live band and special entertainment.

The Aviation Innovation Awards which also takes place during the Gala Evening will recognize some of the region’s most outstanding aviation individuals and organizations. The awards will honour exceptional technological, operational and sustainability innovations.

The Gala Evening and Awards attracts a wide variety of leaders from the Middle East and internationally. For more information on the event visit www.aviationgala.com or contact ken@cme-media.com

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Business News for the MEA region

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DUBAI AIRSHOW

Dubai Airshow 2023 unveils futurefocused conference agenda to shape new era for aerospace and defence The conference will showcase over 300 returning and new speakers to deliver +80 hours of engaging content

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he Dubai Airshow 2023, scheduled to take place from 13-17 November, is set to make waves in the aerospace, space and defence industry with a comprehensive conference agenda featuring nine thought-leadership tracks across five days. More than 300 speakers will deliver upwards of 80 hours of engaging content that will drive the conversation forward on key industry topics.

The CPD-accredited conferences at Dubai Airshow 2023 will play a pivotal role in addressing critical industry challenges and fostering innovation. The event will bring together experts, leaders, and stakeholders to shape the future of aerospace with a focus on priority topics such as Advanced Aerial Mobility, Sustainability, Passenger Experience, Air Traffic Management, Diversity & Inclusion, Space, start-ups and mentoring platform Vista, studentfocused NextGen Leaders, along with the Airworthiness & Safety Conference.

Global leaders confirmed to speak during the conferences include Paul, Griffiths, Chief Executive Officer, Dubai Airports, H.E Sarah

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Bint Yousif Al Amiri, Minister of State for Public Education and Advanced Technology, Chairwoman, UAE Space Agency and Tony, Douglas, Chief Executive Officer, Riyadh Air. The Aviation Mobility stage will host conferences around essential topics on Air Traffic Management (ATM) and Advanced Aerial Mobility, while bringing two new tracks: Passenger Experience, and Diversity & Inclusion.

“Striking the right balance between fostering innovation and ensuring safety and security within regulatory frameworks is paramount for the future of VTOL aircraft.

We are looking forward to sharing the global airport perspective on behalf of ACI members at the Dubai Airshow, where we’ll explore how innovative regulation can empower airports and the industry to soar to new heights while safeguarding the skies and passengers’ trust, bringing added value to local communities, businesses, as well as facilitating the societal transformation towards sustainability,” commented Luis Felipe de Oliveira, Director General, Airports Council International (ACI) World.

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The Aerospace 2050 stage will feature a host of conferences on Sustainability, Space and NextGen Leaders. Topics in focus will include exploring the future of aviation in the context of environmental sustainability and to assess how airlines, airports, and governments can support renewable fuels and energy policies.

“It is an absolute pleasure to be a part of the aviation community at the Dubai Airshow. It is an exciting and productive platform to meet and convene with experts and leaders to set agendas and create a difference for the future of aviation. We are looking forward to showcasing how our new airline will shape the future of travel by being digitally led, while delivering authentic, warm hospitality to our guests throughout their journey and applying the highest sustainability standards at the heart of Riyadh Air’s business,” said Tony Douglas, Chief Executive Officer, Riyadh Air. This year, Dubai Airshow in partnership with the UAE Space Agency will host a 2-day Space-focused conference and will address fostering innovation, highlighting projects and space programs in partnership with private companies and government agencies. The sessions will align with the show’s focus on sustainability, highlighting how space plays a vital role in informing sustainable policies and finding solutions for climate change through earth observation.

The VISTA stage will showcase the startups conference theme featuring panels on aerospace start-ups’ success stories in the UAE and the innovation and business models of start-up airlines.

The Dubai Airshow 2023 conference agenda is set to be a comprehensive exploration of the aerospace industry’s most critical and forward-looking topics, bringing together experts, leaders, and innovators to drive progress and shape the industry’s future.

THE

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Attracting the biggest players in the aerospace, space and defence industry, Dubai Airshow 2023 is all set to be another world-class edition for the industry’s trailblazers and innovators to showcase, identify future trends and opportunities and close winning deals.

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Strategic partners:

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DUBAI AIRSHOW

Dubai Airshow prepares for biggest event on record The number of visitors is expected to exceed the previous edition’s 104,000

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s global players from across the aerospace, space and defence spectrum prepare to gather, this year’s Dubai Airshow is set to be the biggest on record, with 1,400+ exhibitors from 95 countries and visitor numbers expected to grow from last year’s edition.

The 18th edition of the Airshow presents an opportunity to welcome many new and returning industry stakeholders to the Emirate, and reflect on the recovery and growth of the aviation and wider aerospace sectors.

According to the International Air Transport Association (IATA), Middle Eastern airlines posted a 27.3 per cent increase in August traffic compared to the previous year, meanwhile globally, traffic now stands at almost 96 per cent of pre-COVID levels Attendance from regional and international airlines will also reflect the

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strong growth and transformation being witnessed across the industry. Earlier this year, Emirates released its 2022-23 Annual Report, announcing its most profitable year ever with a profit of AED 10.6 billion (US$ 2.9 billion) compared with AED 3.9 billion (US$ 1.1 billion) loss in the previous year. Meanwhile, Etihad Airways announced a record-breaking core operating profit of US$ 296 million in the first half of 2022, compared to a US$ 392 million loss during the same period the previous year, and the world’s first premium leisure airline, Beond, announced its launch this year, further reflecting the return of the luxury leisure market.

Tero Taskila, CEO & Chairman of Beond, said: “Beond is thrilled to have this opportunity to showcase our beautiful, specially-fitted aircraft at the upcoming Dubai Airshow. Embodied in this aircraft is our vision for a ground-breaking approach to premium leisure travel, and promise of a

Business News for the MEA region

pioneering flight experience for our guests.

This marks the beginning of our journey as the world’s first premium leisure airline, and we could not be more pleased to be able to celebrate with industry partners at the Airshow.”

The same growth is being seen across the region. Qatar Airways Group published its annual report for 2022/23 highlighting an extraordinary year with profits reaching US$ 21.0 billion, up 45 per cent compared to the previous year, and Saudia Group just recently unveiled its new brand identity, part of its comprehensive strategy to support the advancement of the aviation sector, not only in the Kingdom but in the MENA region as well, to accommodate the growing demand.

Speaking of its transformation, His Excellency Ibrahim Al Omar, Director General of Saudia Group, said: “This is an exciting time in the Group’s history. The new brand offers much more than an evolution of our visual identity, but rather a celebration of all that we have achieved.

We are implementing a fully integrated program that will enable us to play a driving role in advancing Vision 2030, in line with the targets of the Saudi Aviation Strategy.

We are committed to expanding the fleet of the group to 318 aircraft and serve 175 destinations. We are entering a new era, and we believe that we now have everything in place to deliver on our promise to bring the world to Saudi Arabia and demonstrate what the Kingdom has to offer from a tourism and business perspective.”

The phenomenal growth and innovation will take centre stage at the Dubai Airshow, not only showcasing the progress being made across the industries, but also serving as a platform to drive collaboration, technological advancement and push the boundaries of innovation for the future.

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SUSTAINABLE AVIATION

Emirates and Shell Aviation sign agreement for SAF supply at airline’s Dubai hub

The agreement will see Over 300,000 gallons of blended SAF to be supplied by Shell Aviation to Emirates for use at its Dubai (DXB) hub

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mirates recently announced an agreement with Shell Aviation for the supply of over 300,000 gallons of blended SAF for use at the airline’s international hub in Dubai (DXB). The first SAF delivery under the agreement is expected to commence before the end of the year, making it the first time that SAF is supplied through the DXB airport fuelling system.

The agreement is the latest step forward taken by Emirates as part of its environmental strategy that focuses on three areas: emissions reduction, responsible consumption, and the conservation of wildlife and habitats.

As part of the agreement, Emirates will track SAF delivery and its use data through Avelia, one of the world’s first blockchain powered SAF solutions. Avelia is powered by Shell Aviation and Accenture, with support from Energy Web together with American Express Global business travel. Through Avelia, Emirates will purchase the physical SAF and

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associated environmental attributes to help decarbonise its Scope 1 related emissions, while Scope 3 environmental attributes associated to the same physical SAF will be purchased by Shell Corporate Travel to help decarbonise its related business travel. By using Avelia, the agreement demonstrates how book and claim solutions can enable airlines and corporates to both share the environmental benefits of SAF. Sir Tim Clark, President Emirates Airline said: “We are proud to work in partnership with Shell to make a SAF supply available for Emirates in Dubai for the first time, and to utilise the Avelia platform that provides business travellers the flexibility to align their sustainability targets and reduce their environmental footprint when travelling.

We hope that this collaboration develops further to provide an ongoing future supply of SAF in our hub, as there are currently no production facilities for SAF in the UAE. Aviation plays a vital role in Dubai and the wider UAE economy, and we look forward

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to continue collaborating with like-minded organisations and government entities to look at viable solutions that introduce more SAF, a fuel that is currently extremely limited in supply, into the aviation fuel supply chain and support Emirates’ efforts to reduce emissions across our operations.”

Chu Yong-Yi, Vice President of Shell Corporate Travel said: “Emirates and Shell have a long-standing commercial relationship, and it is fantastic to build on this to now work together on decarbonisation.

This agreement marks a step forward for the aviation industry in the UAE. Enabling SAF to be supplied at DXB for the first time is an important milestone, and a perfect example of how the different parts of the aviation value chain have a role to play in unlocking progress on SAF. We hope that this can act as a springboard for more action on SAF across the aviation industry in the UAE and region, delivering another step forward for our net zero emissions journey.”

As a safe and fully certified drop-in fuel compatible with existing aircraft fleet and airport infrastructure, SAF can be blended with conventional jet fuel at a ratio of up to 50%, creating an aviation fuel that is significantly lower in lifecycle carbon emissions. In its neat form, SAF can reduce lifecycle emissions by up to 80% compared to conventional jet fuel.1 Earlier this year, Emirates successfully completed the first 100% SAF-powered demonstration flight in the region. The airline’s first flight powered by SAF blended with jet fuel took place in 2017, operating from Chicago on a Boeing 777.

The airline has also uplifted SAF for flights from Stockholm, and currently operates flights from Paris, Lyon and Oslo with blended SAF.

COVER STORY

Elevating Private Aviation: An Exclusive Conversation with Paras P. Dhamecha, Managing Director of Empire Aviation Group Exploring Empire Aviation’s Expanding Horizons, Market Trends, and the Future of Private Aviation in the Middle East

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hat are you presenting at Dubai Air Show?

The Dubai Air Show serves as a fantastic stage to introduce the company and our team both to regional and international industry players.

Private aviation is built on professionalpersonal relationships and trust, and so the opportunity to meet our owners, charter

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clients and aviation partners face to face is very important. Of course, the show also provides the perfect opportunity to connect with new people and companies, while also sharing our unique story.

Our story began in 2007 when we established Empire Aviation Group in Dubai, concentrating on aircraft asset management with support from a group

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of seasoned aviation experts. Fast forward to today and we have evolved into a global private aviation enterprise, providing a wide range of integrated aviation services for aircraft owners and charter clients, personalised customer services, all backed by a team of 130 personnel.

Along the way, we have managed most types of business jets from all the main manufacturers, along with other fixed and rotary aircraft. We have also collected a number of industry awards in recognition of the team’s success in delivering world class services and meeting the highest industry standards in all we do, which is very gratifying.

Our goal is to continue expanding our model globally to augment private aviation services worldwide, ensuring aircraft owners enjoy all the advantages of private

As a charter broker, Empire Aviation can arrange aircraft charters worldwide and collaborate with partners in our Luxury Partner programme (including leading hotels at top destinations) to craft the ultimate luxury leisure experience.

We continue to invest in the latest technology developments available to the industry, from the latest satellite communication systems for onboard Wi-Fi capabilities to software technology enhancements for ground and flight operations.

aviation – privacy, safety, comfort, and convenience – while collaborating with a trusted aviation expert advisor and partner.

However, our roots remain firmly planted in Dubai and the UAE, where we are currently developing a new private aviation facility at the Mohammed bin Rashid Aerospace Hub (MBRAH) at Dubai South. This is just a stone’s throw away from the show venue, which is an excellent platform for showcasing aviation in all its forms, in Dubai and the UAE.

What are the latest developments at Empire Aviation?

Currently, Empire Aviation operates one of the Middle East’s most extensive managed fleets of business jets across pivotal regions for private aviation (Middle East, USA, Europe, Africa, and Far East). We provide owners with a choice of aircraft registries (UAE and San Marino) private registries (Cayman Islands), and an aircraft sales representative in the USA. Empire Aviation Group is also the authorised Independent Sales Representative (ISR) for Gulfstream Aerospace Corporation in India.

2023 has been exceptional for Empire Aviation, with strong performances across aircraft sales transactions and charter bookings. We see sustained international interest in all our services – aircraft management, aircraft sales, charter, and CAMO – from various sectors, including

What major trends are you seeing in the private aviation sector?

Paras P. Dhamecha Managing Director, Empire Aviation Group

individuals and families, corporates, and government entities.

Our aircraft management division continues to flourish, with recent additions to our fleet, including a Boeing Business Jet (BBJ). These new aircraft offer more flexibility and options to serve a broader range of clients and charter customers.

We look forward to managing additional new aircraft in early 2024.

Our charter fleet continues to evolve and, besides the Boeing Business Jet, we have several other aircraft on offer.

The evolution of private aviation has seen a significant surge in recent years, thanks to its unparalleled flexibility, convenience, and privacy. Many people have had their first taste of private flying and continue to use private aircraft as charter clients or owners.

As business jet owners operate and fly globally, they need services that can effortlessly manage their aircraft across various regions. This necessity has led to the growth of global networks and partnerships in the aircraft management industry.

Aircraft manufacturers are now producing new and larger aircraft designs for longer, non-stop flights to global destinations. Meanwhile on the ground, private terminals continually enhance their luxurious facilities to meet the expectations of these discerning travellers.

With the increase in regulations, compliance has become an intricate process. This is where Empire Aviation’s specialised aircraft management services come into play, offering essential support.

The demand for charters remains robust, with a growing interest in longer leasing periods. Clients often request repeat charters for the same aircraft, favouring a specific business jet and its familiar crew members. Empire Aviation is also a charter broker and can arrange aircraft charter anywhere in the world and combine a private jet with partners in our Luxury Partner program (including some of the world’s leading hotels at top destinations) to create the ultimate luxury leisure experience. mea-biz.com

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COVER STORY

How do your various aircraft management services differ and what are the advantages?

Empire Aviation Group is a global private aviation business. The company integrates a comprehensive range of services, based on a distinctive asset management approach in which each aircraft owner has a unique ownership business model and a range of personalised aviation services.

Each of our owner business models offers unique advantages, be it comprehensive management, revenue generation, expert maintenance supervision, or access to private jet travel. We have an array of solutions to cater to diverse needs.

Our comprehensive management approach encompasses all operational aspects of aircraft ownership, allowing owners to reap the benefits without getting involved in the daily management.

maintenance and so help to maintain the aircraft’s value and safety.

Empire Aviation’s unique ability to integrate all facets of private aviation – sales, management, operations, and charter – is

Each of our owner business models offers unique advantages, be it comprehensive management, revenue generation, expert maintenance supervision, or access to private jet travel Full-service aircraft management on behalf of owners is the backbone of our services.

Our charter management model offers aircraft owners an opportunity to counterbalance some of their operating expenses through charters, which are increasingly being chartered for longer periods. Empire Aviation takes charge of all the detailed requirements, including marketing the aircraft, scheduling flights, and guaranteeing optimal utilisation.

For owners seeking professional oversight of their aircraft’s airworthiness, we provide CAMO (Continuing Airworthiness Management Organisation) services. These services ensure timely and high-quality

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what sets us apart. It enables us to deliver a rewarding experience to aircraft owners.

The key lies in selecting the right aircraft and entrusting its management to experienced professionals who can safeguard its value through the appropriate ownership model.

How do you view the future of private aviation in the Middle East?

The past few years have been incredibly positive for private aviation and we remain highly optimistic about the future of our industry.

The Middle East is among the fastestgrowing aviation markets and Empire Aviation is investing in the Mohammed bin

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Rashid Aerospace Hub (MBRAH) at Dubai South to develop a new, multi-purpose business aviation facility. This comprises the company’s new global corporate headquarters, Operations Control & CAMO for all group operations, crew check-in and briefing area. The facility offers premium office space, luxury retail F&B outlets and a rooftop lounge for entertainment/events.

We are thrilled to be investing in the future of private aviation with this new facility, which supports MBRAH’s vision to make Dubai the aviation capital of the world.

Empire Aviation Group

Since launching in Dubai UAE in 2007, Empire Aviation Group has developed into a global private aviation business integrating a comprehensive range of services, based on a distinctive aircraft management approach and personalised service, ensuring aircraft owners and clients enjoy all the privacy, safety, comfort and convenience of private aviation. Empire Aviation operates one of the Middle East’s largest managed fleets of business jets, with aircraft based in global locations. The company operates in the key regions for private aviation, covering the USA, Europe, India, Africa and Indonesia, in addition to the Middle East. The Empire Aviation team comprises 130 aviation specialists across the globe. Empire Aviation holds AOCs (Air Operator Certificates) in the UAE and San Marino.

AVIATION FINANCE

Patches of Turbulence The regional aviation business is performing with strength, but despite the post-pandemic turnaround, higher interest rates, fears of recession and geo-political challenges are leading businesses to seek other funding sources

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Business News for the MEA region

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he global aviation market has fully reopened and air traffic is powering ahead of 2019 levels in many markets, as pent-up demand for air travel is sustaining bookings. The International Air Transport Association (IATA) projected that global industry profits will reach $9.8 billion in 2023, more than double the $4.7 billion forecasted last December.

“Economic uncertainties have not dampened the desire to travel, even as ticket prices absorbed elevated fuel costs,” Willie Walsh, the Director General of the global aviation trade body said in June, adding that after a sharp deep following the outbreak of the pandemic, a net profit margin of 1.2% is something to celebrate!

However, despite the sector’s postCOVID turnaround several factors risk derailing IATA’s expectations. These include soaring interest rates to tame inflation, the war in Ukraine, lingering supply chain issues and fears of a recession.

The current operating environment makes it challenging for the key stakeholders in the aviation sector to forecast and plan.

PwC said lessors, lenders, investors and rating agencies will need to look beyond the near term to ensure that sufficient and affordable liquidity is available for deployment as the global aviation sector is set to take delivery of new aircraft worth more than $100 billion in 2023.

With consumers continuing to prioritise spending on air travel, new passenger airlines continuing to be established and record-breaking aircraft orders, the positive momentum behind the recovery is showing no signs of slowing.

Climbing higher in the industry

The GCC has acquired extensive aviation credentials over the past three decades.

The aviation industry in the region saw a huge turnaround in passenger traffic and consequently big order books.

“The region is leading the recovery with May traffic at 17.2% above 2019 levels,” according to IATA. The aviation industry’s main lobby body said Middle Eastern airlines witnessed a 30.8% increase in traffic in May compared to the same period a year ago while capacity rose by 25%.

GCC airlines reported significant profits for the fiscal year 2022/23, boosted by strong demand for leisure travel. Dubai’s Emirates Group reported an annual profit of $3 billion (AED 10.9 billion) for the year ending April 2023 and the aviation behemoth invested AED 7.2 billion in new aircraft, facilities and equipment.

Qatar Airways’ annual revenues soared to $21 billion (QAR 76.3 billion), crediting its strong performance to December’s FIFA World Cup while its net profit stood at QAR 4.4 billion. As well as being home to some of the world’s best airlines – Emirates, Qatar Airways, Etihad and Saudia – the Gulf region

Economic uncertainties have not dampened the desire to travel, even as ticket prices absorbed elevated fuel costs. After a sharp deep following the outbreak of the pandemic, a net profit margin of 1.2% is something to celebrate – Willie Walsh

is home to three leading budget carriers, Air Arabia, flydubai and flynas.

The low-cost airlines also posted record profits, driven by aggressive expansion of routes and fleet. Sharjah-based Air Arabia posted AED 801 million in half-year net profit while its revenues exceeded AED 2.8 billion. flydubai, Dubai’s low-cost carrier, reported an annual net profit of AED 1.2 billion and its revenues soared by 72% to AED 9.1 billion.

The region also offers globally renowned and expanding airports and supports a broad range of ancillary sectors that comprise the broader aviation industry.

Last November, Saudi Arabia unveiled plans to transform Riyadh Airport into a massive aviation hub capable of eventually

As most airlines’ revenue streams are now back on track, delinquency levels for the revised lease obligations have been low through the year and lessors’ profitability has been largely restored – P wC

handling 185 million passengers and processing 3.5 million tonnes of cargo a year.

The King Salman International Airport will cover an area of about 57 km with six parallel runways.

Meanwhile, Abu Dhabi is set to open a state-of-the-art new terminal at its international airport in November. Known as Midfield Terminal Building during the construction phase, the $3 billion Terminal A, can handle 45 million passengers per year and process 11,000 passengers per hour.

The world’s biggest aircraft manufacturers – Airbus, Boeing and Embraer – have publicly identified the Middle East to be one of their primary customer targets and predict nearly doubling of the demands in both single aisle and wide-bodied assets.

The age of resilience

Globally, the post-pandemic era has witnessed an increase in the number of aircraft leasing companies as new entrants pounce on the opportunity to meet airlines’ demands for new fleet additions.

While there were plenty of new entrants, such as Griffin Global Asset Management, SKY Leasing, and Sirius Aviation Capital, Saudi Arabia’s AviLease has shown the fastest and most significant growth.

The Public Investment Fund-owned jet lessor agreed to acquire Standard Chartered’s aviation finance business for $3.6 billion in August. AviLease bought a portfolio of 100 narrowbody aircraft and became a servicer for another 22 jets.

The deal is part of a push by Saudi Arabia to become a global trade, logistics mea-biz.com

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AVIATION FINANCE

and tourism hub, and help diversify its economy away from heavy reliance on oil revenues. The kingdom unveiled a new national airline, Riyadh Air, in March.

The carrier, which is set to the skies by 2025, plans to acquire more planes following the purchase of 39 Boeing 787-9 widebody jets in March, with options for 33 more.

Meanwhile, Dubai Aerospace Enterprise signed a multi-tranche finance deal for $1.6bn with 26 lenders in September, the largest loan amount raised by the aircraft leasing firm to date.

The UAE aircraft leasing firm agreed to acquire a total of 64 Boeing 737 MAX aircraft in August. The acquired portfolio, which includes Boeing 737 MAX 8s, 737 MAX 9s, and 737 MAX 10 aircraft, is scheduled to be delivered between 2023 and 2026.

Founded in 1985, DAE serves more than 170 airline customers in over 65 countries, and the group’s leasing division manages a fleet of about 425 Airbus, ATR, and Boeing aircraft – with a value exceeding $17 billion.

US Federal Reserve (Fed) Chairman Jerome Powell said in late August that inflation remained too high and central bankers were prepared to tighten more if necessary. A hawkish monetary policy by the US Fed has taken the benchmark overnight interest rate from the near-zero level in March 2022 to its current 5.25%5.50% range.

While rates are higher now than at any time since the global financial crash of 2008, they are not out of kilter with longer-term historical norms.

The aviation finance market is adapting, but it will take time. The natural upward movement of lease rate factors is taking place, but as has been the case in the past, there is a lag in the correlation with the rising rate environment.

Fasten your seatbelts

The aircraft leasing industry demonstrated its incredible resilience last year by seeming to shrug off the worst disaster in its history when the sanctions that were imposed on

International traffic climbed 29.6% in July compared to the same month a year ago with all markets showing robust growth and international revenue passenger kilometres reached 88.7% of July 2019 levels – International Air Transport Association

Aircraft leasing rates are expected to surge, with many lessors already indicating an uptick, but it will take some time for them to catch up with rising interest rates to return to that equilibrium with the debt markets.

KPMG said over the past 18 months the rising rate environment increased the cost of debt became unattractive and many companies pivoted back to commercial banks and private equity firms for access to more efficient capital.

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Russia following the outbreak of the war in Ukraine effectively trapped 550 aircraft in the country.

The Russian market is relatively small in terms of global air traffic, but it did have an overweight proportion of leased aircraft.

KPMG said the publicised impairments relating to the loss of the Russian leased fleet add up to more than $7 billion.

UAE aircraft leasing firm DAE said there was an asset write-off of $538 million related to its aircraft stuck in Russia after

Business News for the MEA region

Moscow enacted a law in March 2022, allowing the country’s airlines to seize leased planes to fly them domestically.

Irish lessor Avolon Holdings recorded an impairment of $304 million from its exposure to Russia. Many lessors have active legal claims against insurance companies, which are refusing to pay out because recovery of the aircraft may still be possible, but such large-scale litigation action is expected to take several years to resolve.

The global aviation finance and leasing industry has been in the middle of unprecedented market conditions for almost three years now. Aircraft leasing companies including DAE Capital, ACG Aircraft Leasing, SMBC Aviation Capital Aviation and BOC Aviation have been engaged in a legal tussle to repossess their aircraft after the Indian budget carrier Go First was granted bankruptcy protection in May. Despite the devastating impact of another global shock event, many larger lessors have been able to cope with the loss, at least for now. Industry analysts expect two-thirds of new passenger aircraft deliveries to be financed by lessors as global traffic is now projected to be at 95.6% of pre-COVID levels.

“As most airlines’ revenue streams are now back on track, delinquency levels for the revised lease obligations have been low through the year and lessors’ profitability has been largely restored,” said PwC. IATA said international traffic climbed 29.6% in July compared to the same month a year ago with all markets showing robust growth and international revenue passenger kilometres (RPKs) reached 88.7% of July 2019 levels.

Future increases in aircraft financing will be determined by air travel recovery as well as the efficiency and environmental performance of aircraft fleets. With the current total leased fleet amounting to roughly half of the global fleet, aircraft lessors are expected to continue playing an increasingly significant role in the growth of the aviation sector.

AVIATION FINANCE

Cleared for Take Off

Vijay Valecha Chief Investment Officer, Century Financial gives his overview of Aviation Finance and its resilience in the face of multiple challenges, detailing the vital role it plays in the global financial landscape, how the sector is now changing and primed for growth in the GCC

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as aviation finance activity in the region returned to pre-pandemic levels?

As 2023 unfolded, the aviation industry showed signs of recovery. Travel restrictions eased, particularly in China, signalling further economic revival. Despite the turbulence caused by the COVID-19 pandemic and rising crude oil prices, airlines invested in fuel-efficient aircraft to manage cost pressures.

Global passenger traffic rebounded significantly, approaching pre-pandemic levels. Initially, international travel lagged behind domestic travel due to ongoing restrictions.

However, as vaccination efforts progressed and policies eased, international passenger flows improved, especially in the Asia-Pacific region. By Q1 2023, total revenue passenger kilometres (RPKs) reached 88.0% of 2019 levels, driven by recoveries in both domestic and international travel.

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Vijay Valecha, Chief Investment Officer, Century Financial

Notably, the aviation industry displayed resilience and adaptability, with domestic traffic rebounding swiftly in regions like Europe, Latin America and the Middle East, surpassing 2019 levels. Asia-Pacific airlines excelled, achieving 98.9% of 2019 domestic RPKs by March 2023.

Business News for the MEA region

Sub Head - A Road to Recovery

The GCC region is home to some of the world’s fastest-growing airlines and has a strong track record of investing in aviation infrastructure. Despite the challenges posed by the COVID-19 pandemic, the ongoing conflict in Ukraine and the rising cost of capital, the long-term outlook for the GCC aviation finance market remains positive.

The GCC region is poised to leverage the anticipated expansion of the global aviation sector, benefiting from its strategic location at the intersection of Europe, Asia, and Africa, positioning it as a pivotal hub for international air travel.

Additionally, the region enjoys favourable economic conditions, with strong economic growth projected in the foreseeable future, providing a solid foundation for the aviation industry’s development. Furthermore, GCC governments are actively fostering this growth through substantial investments in airport infrastructure and the implementation of various initiatives designed to attract both airlines and aviation finance entities to the region, further solidifying its status as an aviation powerhouse.

In 2022, the total value of aviation finance transactions in the GCC amounted to $10.2 billion, down from $15.2 billion in 2019, the last full year before the pandemic. Additionally, the number of aviation finance transactions in the GCC declined from 81 in 2019 to 52 in 2022.

Several factors contributed to this decline, including the earlier mentioned impacts of the global pandemic, the conflict in Ukraine and increasing cost of capital.

Despite these challenges, the longterm outlook for the GCC aviation finance market remains positive. Projections suggest that the value of aviation finance deals in the GCC will reach $15.7 billion by 2025. This optimism is grounded in the GCC region’s status as a home to rapidly expanding airlines and its expected robust economic growth in the coming years.

The GCC region is also taking steps to address the challenges facing the aviation finance industry. For example, the region is investing in digitisation and technology and a sustainable future.

Are digitisation and technology easing the administrative burden of the managing of multiple funding structures?

The aviation finance sector is undergoing a technological revolution through digitisation, substantially alleviating the administrative complexities tied to managing multiple funding structures. This transformation is exemplified by several innovative tools and approaches. Document Management Systems, for instance, streamline the gathering, storage and retrieval of documents associated with various funding structures, leading to time savings, error reduction and enhanced efficiency.

Workflow Automation tools take on tasks such as data entry, approval routing and reporting, allowing personnel to concentrate on strategic endeavours. Furthermore, data analytics tools offer valuable insights into the performance of a range of funding structures, facilitating more informed resource allocation and risk management decisions. Together, these advancements signify a new era of streamlined financial management in aviation finance.

Examples of digitisation and technology tools in aviation finance include loan origination software for automating loan processes, portfolio management software for tracking performance and risk management software for identifying and assessing risks. While these advancements offer cost savings and benefits, it’s crucial to implement the right solutions, provide

staff training and maintain robust risk management frameworks to mitigate associated risks. Overall, digitisation and technology simplify operations, enhance efficiency and elevate transparency in aviation finance, ushering in a new era of streamlined financial management.

Does Avilease’s acquisition of Standard Chartered aircraft leasing business signal anything prophetic about the role of banks in aviation finance?

The recent acquisition of Standard Chartered’s aircraft leasing division by AviLease, a Saudi-owned entity, indicates a significant development that could reshape the role of banks within aviation finance.

Historically, banks have been dominant players in this field, but the emergence of newcomers like AviLease suggests a more competitive and diversified landscape.

Looking ahead, the future of aviation finance in the GCC appears promising Several factors are driving this evolving trend. Firstly, the global aviation industry is gearing up for significant expansion, resulting in a heightened demand for financing.

This surge in growth creates a window of opportunity for newcomers like AviLease to disrupt established banking institutions.

Secondly, there’s a growing emphasis on sustainability within the aviation finance sector. Banks are encountering mounting pressure to diminish their reliance on fossil fuels, which in turn, is paving the way for non-bank lenders such as pension funds and sovereign wealth funds to actively participate in aviation financing, aligning with more environmentally conscious investment practices.

Banks are expected to maintain their relevance but adapt to shifting market

dynamics and the integration of new technologies. Anticipated transformations in the role of banks in aviation finance include specialised focuses, collaborative ventures with non-bank lenders and technological integration.

Are banks and aviation finance specialists taking steps to incorporate sustainability and climate change into their funding structures?

Banks and aviation finance specialists are increasingly incorporating sustainability and climate change considerations into their financing mechanisms. Initiatives include the development of climatealigned finance frameworks, exploration of blended financing structures, financing for sustainable aviation fuels (SAFs), and support for airlines’ sustainability initiatives.

Sustainability integration offers advantages such as risk mitigation, enhanced investment prospects, and improved reputation.

How does the near future for aviation finance in the GCC look?

Looking ahead, the future of aviation finance in the GCC appears promising.

Projections indicate that by 2025, the GCC aviation finance market is set to reach a valuation of $15 billion. This growth is underpinned by the expected expansion of the GCC aviation sector, driven by robust economic development, population growth, and substantial investments in airport infrastructure.

While banks currently dominate the sector, the entry of non-bank lenders and growing interest in sustainable aviation finance signal a dynamic and competitive market.

Recent successes, such as Dubai Aerospace Enterprise’s (DAE) significant financing deal, illustrate the confidence banks have in the region’s aviation finance potential.

In conclusion, aviation finance in the GCC is poised for growth and transformation.

Digitisation, technology, sustainability and changing roles of banks are shaping the landscape, offering opportunities for investors, lenders and industry stakeholders to navigate the skies of this dynamic sector. mea-biz.com

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DUBAI AIRSHOW

Dubai Airshow 2023 to showcase the innovations carving a sustainable future The aviation industry contributes approximately 2% to 3% of all global CO2 emissions but with a constant increase in passenger demand, this could rise to 25% to 30% by 2050 if no actions are taken

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Business News for the MEA region

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s the aerospace and defence industries continue on their pathways to net zero, this year’s Dubai Airshow will be the ultimate platform for players from across these industries to convene, bringing the latest solutions that will help advance these crucial economic sectors towards a sustainable future.

The industries have taken bold steps towards decarbonisation, with innovation accelerating at an exponential rate. As Dubai

Airshow leads up to the United Nation’s annual global climate change conference, COP28, which is also taking place in Dubai towards the end of the year, industry stakeholders will take the opportunity to showcase their latest solutions towards net zero emissions, discuss collaborations and gain new insights.

The aviation industry contributes approximately 2% to 3% of all global CO2 emissions but with a constant increase in passenger demand, this could rise to 25% to 30% by 2050 if no actions are taken, according to a new report by Frost & Sullivan titled ‘Sustainable Technologies in Aviation’, which raises the urgency on manufacturers, airlines and airport operators to undertake sustainability initiatives.

Additionally, global production capacity for Sustainable Aviation Fuel (SAF) needs to exceed 30 billion litres by 2030 and 450 billion litres by 2050 for airlines to be able to achieve net-zero targets. In 2020, SAF production was just 450 million litres, according to IATA, which is less than 0.05% of the global demand of jet fuel.

However, several initiatives are already underway in the Middle East region. Recently, Abu Dhabi Future Energy Company (Masdar) signed an agreement with Airbus, to support the development and growth of the global SAF market. The agreement will also see the entities collaborate on Green Hydrogen, and Direct Air Capture technologies. Meanwhile, Qatar Airways signed a deal with Shell to source 3,000 metric tonnes of neat SAF at Amsterdam Schiphol airport, making it the first carrier in the Middle East and Africa to procure a large SAF amount in Europe, beyond government SAF mandates.

Globally, Shell Aviation has signed several other agreements to provide airlines including JetBlue and Japan Airlines (JAL) with SAF, and Air bp, the specialised aviation division of multinational oil and gas company BP, has announced the first sale of SAF from its Castellon refinery in Spain, marking another important milestone at it works towards making SAF more available.

Earlier this year, Emirates successfully completed a demonstration flight powered

by 100 per cent SAF on a Boeing 777300ER, as part of its plans to help the global aviation industry meet carbon emission targets. The airline has also earmarked $200 million to fund R&D on advanced fuel technologies that can reduce commercial aviation’s environmental impact.

Exhibitors at the Airshow are set to showcase their latest technologies and innovations that will help advance the industry towards achieving global net zero emissions targets.

Mikail Houari, President, Africa and Middle East at Airbus, commented: “At Airbus, we continue to demonstrate our unwavering commitment to leading the decarbonisation journey in the aerospace industry through our pioneering role in developing disruptive technologies.

Whether this is through hydrogen-powered commercial aircraft or other sustainable solutions when it comes to engines and fuels, our goals are a testament to the potential for revolutionising the way we fly. We are relentlessly pursuing ambitions of building a more sustainable future for aviation as we seek to make our commercial fleet capable of flying with 100% SAF by 2030.”

Separately, Honeywell has launched a new technology called UOP eFining™ that produces lower-carbon aviation fuel from green hydrogen and carbon dioxide captured from industry.

Mohammed Mohaisen, president and CEO, Honeywell Middle East and North Africa, commented; “Sustainable Aviation Fuel represents a ready now opportunity to drive the sustainable growth of the aviation industry, yet it is still barely tapped into. Technologies that can harness readily abundant CO2 to produce SAF are transformational in terms of how we fuel aircraft, and will play an important role in the long-term decarbonization of the sector. That is why we recently added UOP eFining™ to our existing Ecofining and ethanol-to-jet fuel portfolio, offering customers multiple pathways to SAF production through proven technology, and helping them meet the rapidly growing demand for renewable fuels today.”

Dubai Airshow has confirmed that

sustainability is an increasingly important topic of discussion and area of focus for its stakeholders at the upcoming edition, taking place from 13-17 November 2023 at Dubai World Central (DWC), Dubai Airshow Site under the theme of ‘The Future of the Aerospace Industry’.

The 18th edition of Dubai Airshow will build on the momentum across the industry with special sustainability-themed conference tracks. Boeing will be the host sponsor for the Aerospace 2050 stage, which will include a two-day Sustainability conference that is set to return bigger than ever given the topic’s ever-growing importance. Industry experts will discuss steps on creating a more sustainable aerospace ecosystem, covering some of the most pressing sustainable challenges and opportunities.

Kuljit Ghata-Aura, President, Boeing Middle East, Turkiye and Africa, commented: “Boeing is very proud to be participating in the Dubai Airshow again, and we are especially pleased to be the sponsor of the Aerospace 2050 conference. The aviation industry is committed to achieving net zero carbon emissions by 2050, and Boeing is actively developing airplanes and technologies which will enable our airline customers to meet these goals. We look forward to sharing our experience and engaging with our industry peers and partners at Dubai Airshow 2023.”

The sustainability conference, with sponsors including Air BP, Shell Aviation and Asia-Pacific Space Cooperation Organization (APSCO), will focus on key topics for 2023 including hydrogen-powered aviation, SAF, COP28 predictions, efficient engines, streaming operations, hybrid and electric aircraft. It will also address how to prepare for carbon neutral passengers of the future and creating a low-carbon aviation energy hub through global leadership.

With the industry and the region setting a firm agenda for reducing emissions, visitors will be able to hear new insights and discussions on the sustainability trends shaping the industry’s future, as well as have the opportunity to explore a plethora of new technologies, innovations and initiatives. mea-biz.com

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TECHNOLOGY ACHIEVEMENT AWARDS 2023

MEA Business Technology Achievement Awards 2023 (Winners)

The winners of the MEA Business Technology Achievement Awards 2023 were recently announced. The awards recognise exceptional excellence in the technology sector. The award winners’ presentations will take place during GITEX Technology Week from 16 – 20th October 2023.

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CATEGORY

Technology Sector

WINNER

Outstanding sector leadership and growth – Batelco Mobile App

Software

Batelco, Part of the Beyon Group

Exceptional Products/Services

Sustainability Programmes

Beyon

Innovative Collaborations and Partnerships - Batelco Power BMW Vehicles with eSIM Technology

Telecoms

Batelco, Part of the Beyon Group

Innovative Collaborations and Partnerships

Metaverse

BEDU

Outstanding sector leadership and growth

Cloud Services

Cloudflare

Exceptional Products/Services

Smart Cities

CommScope

Ground-breaking products/services - Propel

Telecoms

CommScope

Exceptional Products / Services

Financial Technology

Liv (by Emirates NBD)

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Business News for the MEA region

New Product/Service launch

Security and Cyber Security

Forcepoint

Exceptional Products/Services

Sector Based Technology

HID Physical Identity and Access Management

Ground-breaking products/services

Security and Cyber Security

HID Physical Identity and Access Management

Exceptional Products/Services

Open Nomination Award

Jeraisy Computer and Communication services

Ground-breaking products/services

Financial Technology

Ministry of Tourism, Kingdom of Saudi Arabia

New Product/Service launch

Financial Technology

Ministry of Tourism, Kingdom of Saudi Arabia

Outstanding sector leadership and growth

Robotics

Ministry of Tourism, Kingdom of Saudi Arabia

Outstanding sector leadership and growth

AI and Machine Learning

Mozn

Ground-breaking products (Achievement Award)

Nexign IoT Connectivity Platform

Nexign

New Technology (Achievement Award)

Nexign IoT Connectivity Platform

Nexign

Innovative Collaborations and Partnerships (CBO & Omantel)

Financial Technology

Omantel

New Product/Service launch - Sehati

Healthcare

Omantel

Outstanding Sector Leadership - Oman

Telecoms

Omantel

New Technology

Security and Cyber Security

Rubrik

Exceptional Products/Services

Security and Cyber Security

Rubrik

New Product/Service launch – Sennheiser TeamConnect Ceiling Medium

Open Nomination Award

Sennheisser

Exceptional Products/Services

Hardware

SHARJAH CUSTOMS

Exceptional Products/Services

Software

Shipsy (Llama Logisol Pvt Ltd)

Ground-breaking products/services

Software

Skiplino

New Technology

Software

Skiplino

Innovative Collaborations and Partnerships

Ecommerce

stc

Innovative Collaborations and Partnerships

Sector Based Technology

stc

Innovative Collaborations and Partnerships

Software

stc

Outstanding sector leadership and growth - stc Bahrain’s Business sectors’

Open Nomination award

stc Bahrain

Ground-breaking products/services - InsureTech proposition of stc Bahrain

Telecoms

stc Bahrain

New/product service launch – stc pay

Telecoms

stc Bahrain

New Technology

5.5G

stc Kuwait

Exceptional Leadership Award - Mr. Mohammed Al Nusif, CEO

Telecoms

solutions by stc Kuwait

Outstanding sector leadership and growth

Security and Cyber Security

Trend Micro

Exceptional Products/Services

Software

Veeam Software

Outstanding sector leadership and growth - Diversity, Equity and Inclusion

Open Nomination Award

Zain Group

Innovative Collaborations and Partnerships - Zain Group & Omantel

Telecoms

Zain Group

Exceptional Products/Services

Data Platforms

ZainTECH

Innovative Collaborations and Partnerships - Zain Group & IE University

Open Nomination Award

Zain Group

Ground-breaking products/services - ChatGPT

AI and Machine Learning

OpenAI

Exceptional Product/Services - IBM watsonx

AI and Machine Learning

IBM

New Product/Service launch

Cloud Services

Microsoft

New Product/Service launch

AI and Machine Learning

Amazon

Exceptional Product/Services

Cloud Services

Salesforce

Ground-breaking products/services

Ecommerce

Shopify

mea-biz.com

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TECHNOLOGY ACHIEVEMENT AWARDS 2023

Highlights

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Business News for the MEA region

Print Ad W21xH27cm.indd 2

06/10/2023 7:39 PM

PARTNER CONTENT

Real Estate Income in the UAE – how it is treated for corporate tax purposes Real estate is a significant sector in the UAE but the new corporate tax law was initially silent on many aspects of the real estate businesses. A recent cabinet decision has clarified the taxation of revenue deriving from real estate for companies and individuals

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ax Treatment of the property held by a natural person

A natural person who owns property in the UAE may be subject to taxation under the provisions of Cabinet Decision No. 49 of 2023 if the activity is related to any licensed commercial activity.

For example, one of the activities that are subject to license and might apply to privately

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owned property for investment purposes is “Leasing and Management of Self-Owned Property” (Activity code no. 6820011).

According to this decision, businesses or business activity of a natural person, be it a resident or a non-resident, are subject to corporate tax if the turnover derived from such activities exceeds AED 1M within a calendar year.

Business News for the MEA region

Patryk Karczewski Partner, Head of Tax Practice, Amereller

On the contrary, if the activity of the natural person is an investment activity that can be conducted without a commercial license that relates to (directly or indirectly) the sale, leasing, sub-leasing and renting of the real estate, then the income from such activity is non-taxable.

ZainTECH corporate ad 21x27 cm butterfly.pdf

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PARTNER CONTENT

Each Emirate has its own laws in regard to real estate business. Hence, natural persons should closely monitor business licensing laws in the Emirates where they hold their properties to properly assess tax implications on the income received from the real estate.

Tax Treatment of the property held by a company

For a company that owns real estate, there are three categories of property that are treated differently: Non-commercial property Commercial property inside a free zone Commercial property outside a free zone (on the ‘mainland’) For non-commercial properties, which includes real estate that is used non-exclusively as for a business or business activity and properties used as a place of residence or accommodation including hotels, motels, bed and breakfast establishments, serviced apartments and the like, the income attributable to such property will be subject to corporate tax at 9% as a rule.

For example, if your business holds residential property in a Free Zone (e.g., in DIFC) and you rent it out to your employee as part of his employment package (typically by withholding housing allowance in lieu of collecting rent), then such rental amount will be added to your taxable income and subject to the standard rate.

If the property is commercial and in the Free Zone, then the treatment will be different for owners that have the status of a Qualifying Free Zone Person (QFZP) to those that are treated as typical taxpayers.

Recently, the Ministry of Finance held a Public Consultation regarding the corporate tax regime for Free Zones, allowing businesses and other interested parties to submit their feedback on the promulgated corporate tax rules pertaining to Free Zones by the 9th of August 2023. Hence, it cannot be excluded that certain changes will be introduced to the legislation in the near future.

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As described in the Federal DecreeLaw no. 47 of 2022, the Qualifying Free Zone Person can apply a 0% corporate tax rate to the income that is described as the Qualifying Income. The entity must meet the following conditions to be able to apply for the QFZP status: The taxpayer maintains adequate substance in the State.

The taxpayer derives the Qualifying Income as defined by the CD No. 55 of 2023 and the MD No. 139 of 2023.

The taxpayer has not elected to be subject to corporate tax at a

QFZP and the other transacting party is also established in the Free Zone, then income sourced from such activity will be considered as the Qualifying Income and subject to corporate tax at 0%.

In any other case, i.e., transacting party is established outside the Free Zone, or the owner does not meet conditions for the QFZP (or made an election to be a regular taxpayer despite meeting conditions for the QFZP status), the income sourced from the commercial property located in the Free Zone will be subject to corporate tax at 9%.

Type of Owner

Status of Owner

Location of Property

Type of Property

Tax Treatment

Juridical Person

Non-Resident

Mainland

Commercial

Taxable @9%

Free Zone

Non-commercial Commercial Non-commercial Commercial Non-commercial Commercial

Taxable @9% Taxable @9% Taxable @9% Taxable @9% Taxable @9% Taxable @0%* Taxable @9%

Mainland

Non-commercial Commercial

Taxable @9% P re d o m i n a n t l y non-taxable**

Non-commercial

P re d o m i n a n t l y non-taxable** P re d o m i n a n t l y non-taxable** P re d o m i n a n t l y non-taxable** P re d o m i n a n t l y non-taxable** P re d o m i n a n t l y non-taxable** P re d o m i n a n t l y non-taxable** P re d o m i n a n t l y non-taxable**

Free Zone Resident

Natural Person

Non-Resident

Mainland

Free Zone

Commercial Non-commercial

Resident

Mainland

Commercial Non-commercial

Free Zone

Commercial Non-commercial

standard rate of 9%.

The taxpayer trades with Related Parties at an arm’s length principle and maintains the transfer pricing documentation.

The taxpayer prepares audited financial statements.

The taxpayer observes de minimis requirements.

If the owner has the status of the

Business News for the MEA region

The above is summarised in the below table for ease of reference: We at AMERELLER TAX can help you properly assess your obligations resulting from owning a property in the UAE. Taking into account the significant amounts that can be generated by real estate, it is important for the owners to understand and comply with the new tax regulations related to those assets.

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SAVINGS AND INVESTMENT

Providing Prosperity

Mohammed Qasim Al Ali Group Chief Executive Officer at National Bonds Corporation talks with MEA Business about how meeting their objectives to elevate financial well-being through the evolving savings and investments landscape, will meet the diverse financial needs and aspirations of the people of the UAE

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lease summarise the primary objectives of National Bonds.

National Bonds is a Shari’acompliant savings and investment company owned by the Investment Corporation of Dubai, established in 2006.

Our objectives are centered on elevating people’s financial well-being, while contributing to the UAE’s vision of economic diversification. To achieve these goals, we work towards enhancing financial literacy and encouraging wealth accumulation by offering innovative savings and investment solutions for both individuals and corporations.

We also cater to the community’s aspirations through our real estate arm, National Properties, and have developed projects across the UAE as part of our fund deployment strategy. These innovative projects provide the highest standard of living and offer customers, from all walks of life, excellently maintained and welllocated properties.

Individuals’ welfare is at the core of our beliefs, and we are working with various business partners for the betterment of society. We have launched several successful initiatives, such as “Al Manasah” Sukuk Trading Platform, an innovative Shari’a compliant digital platform providing liquidity to support Sharia-compliant banking institutions with Murabaha

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UAE “Taaleem” Holding Group; to ensure a formidable foundation for the education of future generations.

How has the general approach to savings and investments evolved since the 2006 inception of National Bonds?

Mohammed Qasim Al Ali, Group Chief Executive Officer at National Bonds Corporation

financing for their retail & corporate customers ,“Sukuk Al Waqf”, which supports people in need, the Dubai “Green Fund” participation for a sustainable environment, as well as our investment in the second largest public educational player in the

Business News for the MEA region

Since the inception of National Bonds in 2006, the landscape of savings and investments has undergone a significant evolution. Initially, we started by offering savings bonds, following which the company swiftly diversified its product range to cater to different customer objectives and aspirations, including employee savings programs, retirement, end-of-service capital growth and objective-based savings.

Our agile and robust investment strategy aims to optimise returns for bondholders while safeguarding their capital against economic headwinds. Our proven track record over the last 17 years and consistent distribution of competitive profits are evidence of our strategies’ effectiveness.

In 2022 we witnessed another strong year in which National Bonds investment portfolio soared to AED 13.7bn ($3.7 billion), a 15% increase compared to the previous year, which is a testament to the customers’ ever-increasing confidence in the company and its offerings.

Our product portfolio boasts a mindful expansion, catering to both individual

and corporate needs. This segregation ensures that distinct requirements are met effectively. For instance, we introduced ‘Tejouri Al Emarateyat’, a program for Emirati Women, while “Global Savings Club” and “Golden Pension Plan” are customised for corporates.

Complementing these solutions is our rich AED 35 million rewards program, which is specifically designed to encourage and reward consistent savings behavior amongst all segments of society. In parallel, we have heavily invested in our digital solutions, designed to enhance the customer experience and facilitate a seamless savings journey.

Over the years, there has been a shift in the perception of risk associated with investments. Most investors are now more open to a diversified portfolio that includes a mix of assets, while shrewd ones seek personalised investment solutions that align with their risk tolerance, goals and values. This demand has led us to develop innovative solutions and services tailored to individual preferences.

Approaching one year since the launch of the National Bonds Golden Pension Scheme, how is demand growth looking?

As we approach the one-year mark since the launch, we are pleased to report a strong and promising growth in demand. The “Golden Pension Plan” has resonated well with our target audience, addressing a critical need for retirement planning and financial security in the UAE. Furthermore, this initiative offers an additional avenue for corporations to elevate their employee retention strategies.

The demand for this program has exceeded our initial projections, indicating a robust appetite among corporates to secure the best retirement benefits for their employees. The program’s unique combination of an investment component with a pension focus has captured the attention of both organisations and those new to financial planning for the future.

In addition to boosting end-of-service benefits, employees who are signed up for the “Golden Pension Plan” also enjoy

entry into the National Bonds’ AED 35 million Rewards Program.

According to the 12th edition of the National Bonds Savings Index, proprietary research, 82% of employees in the UAE are open to employers investing their end-of-service funds, which affirms the importance of the Golden Pension Plan and National Bonds’ strategic objectives to offer all customers the tools they need to secure their future.

Tell us about the new National Bonds Second Salary Plan for UAE residents.

In line with our objective of crafting flexible programs, we launched the “Second Salary Plan” as an integral part of our long-term commitments. This program offers customers, both UAE Nationals and Expats, the ability to generate supplementary income.

According to our recent National Bonds Savings Index, 76% of the young population are thinking about saving and investing in the UAE, particularly those aged (21-29), which illustrates the fact that financial literacy is increasing amongst the younger generation, and they are now more savvy about securing their future.

The Index also states that 68% of those who have not saved yet plan to save soon, and 52% expressed their intention to increase investment in financial products within the next two years.

Our “Second Salary Plan” is an innovative and flexible solution that gives customers the ability to save monthly for a period ranging from 3-10 years with the option to deposit a lump sum amount as and when they want, to boost their accumulated funds. After this ‘savings period’ is complete they receive their principal amount and the accumulated profit as a monthly income, also for a chosen period of time.

How is National Bonds applying technology and digitisation to your products and services?

Ongoing digital transformation, in line with new technologies and innovations to provide an elevated customer experience and empower the team to deliver on promises to stakeholders is vital to us.

From a customer perspective, we have significantly enhanced our mobile and digital services where we have combined convenience and personalised experiences, allowing customers to connect with us anytime and anywhere. Whether the customer wants to explore or subscribe to our programs, ask questions, or avail our services - everything is available online with seamless journeys. Furthermore, this is powered by a state-of-the-art CRM platform to provide outstanding services and robust engagement with our customers for continuous innovation to fulfill their needs.

A robust and agile back-end operation is key to delivering world class services.

We have embarked with Azentio’s market leading Islamic Banking solution, “iMAL” to support our quest to improve process efficiency, enhance internal controls and deliver an exceptional customer experience as part of our ambitious growth strategy.

Our infrastructure, expert team, adoption of new cutting-edge technologies such as Robotic Process Automation, AI, and connectivity with our strategic partners, are key market differentiators.

We don’t simply follow the technology trends; we endeavor to be ahead of the game at all times.

As the population and economy of the UAE grows, how is National Bonds planning to accommodate this development?

Within a constantly changing economic environment, we remain the stable, yet agile savings and investments hub, true to our promise to encourage a sustainable financial future and maximise returns for both individuals and corporations.

At National Bonds it is fundamental for us to be the contributor to individual, corporate and national growth, by offering diverse and inclusive programs whilst enhancing financial literacy in the nation.

Hence, in response to the dynamic growth, we shall continue to design innovative programs and digital creative solutions to seamlessly meet the diverse financial needs and aspirations of the population of the UAE. mea-biz.com

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AI IN BANKING

Intelligence Quotient Bill Farrell Managing Partner IBM Consulting MEA discusses the uses of AI in the regional financial sector highlighting the clear benefits it brings to businesses and the adaptations and reskilling it will spur in the workforce

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Business News for the MEA region

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ow can hybrid cloud and AI capabilities help the business growth of banks and financial institutions?

Modern financial institutions demand modularity, security, openness, AI for business-driven capabilities and collaboration on a hybrid cloud. Hybrid cloud and AI success are built at the intersection of flexible and innovative IT, business and financial strategies that can significantly contribute to the business growth of banks and financial institutions in several ways.

AI, Data and automation, integral components of this hybrid model, play a crucial role in enhancing various aspects of

banking operations. At IBM, we empower clients to elevate customer experiences, modernise core banking infrastructures, pioneer innovative payment solutions and transform enterprise risk management.

These technologies streamline processes, automate repetitive tasks, minimise errors and boost cost efficiency. By freeing up employees from routine tasks, AI enables them to focus on more strategic responsibilities, leading to increased productivity.

Moreover, AI can contribute to improved compliance by automating monitoring and reporting processes, thereby reducing noncompliance risks. Additionally, the ability to adapt quickly to dynamic market conditions and evolving customer expectations is a key benefit. AI achieves this by analysing vast amounts of data, facilitating informed decision-making.

The synergy of hybrid cloud and AI capabilities empowers banks and financial institutions to innovate swiftly, enhance operational efficiency, ensure compliance and achieve substantial cost savings, ultimately fostering business growth in a competitive landscape.

How do you see the role of generative AI shaping the future of business?

Generative AI is on the brink of a transformative era. Foundation models, a driving force behind the most potent

The broader business landscape is also recognising the impact, with the report by IBM Institute for Business Value’s, Seven Bets, highlighting generative AI among the seven trends shaping the future of business.

This signifies the importance of the shift toward an “AI-first” mindset, influencing leaders to capitalise on AI’s current and future opportunities while effectively managing enhanced risks across their organisations. To support clients in this journey, IBM Consulting has established a Centre of Excellence (CoE) for generative AI. It stands alongside IBM Consulting’s existing global AI and Automation practice, which includes 21,000 data and AI. The CoE helps accelerate clients’ business transformations with enterprise-grade AI, including watsonx, as well as technology from our ecosystem of business partners.

Bill Farrell, Managing Partner IBM Consulting MEA

Collaborations between tech giants like SAP and IBM aim to harness generative AI and large language models for a superior user experience, faster decision-making and deeper insights, transforming business processes. Practical applications are already visible, such as the use of IBM’s foundation models and generative AI in the Masters golf tournament to automatically add AI-generated spoken

Generative AI holds immense potential to spur innovation and elevate productivity in the financial sector of the Middle East generative AI, are poised to revolutionise business operations rapidly.

An IBM study, “CEO decision-making in the age of AI” found 43% of CEOs leverage generative AI for strategic decision-making while 75% of CEOs hold the belief that the organisations equipped with the most advanced generative AI win.

commentary to every shot, player and hole. In addition to that is the enhancement of Wimbledon and US open’s digital fan experience through IBM watsonx. These features included AI commentary for insightful match highlights on the app and AI Draw Analysis, which rates players’ draw favourability.

How can generative AI spur innovation and boost productivity in region’s financial sector?

Generative AI holds immense potential to spur innovation and elevate productivity in the financial sector of the Middle East.

The region’s commitment to innovation is exemplified by initiatives like Saudi Arabia’s Vision 2030 and the UAE’s Vision 2071. The 2023 report by the World Government Summit (WGS) also positions the Middle East as a promising hub for technology.

Generative AI plays a pivotal role in this transformative landscape; enhancing the efficiency of customer service reps by enabling access to iterative quick responses to complex queries posed by customers; deepening customer engagement through digital technologies, intelligence and analytics to provide personalised, conversational responses to queries, not only about financial transactions and data but also for non-financial information at financial institutions such as careers, policies, education and more.

IBM’s groundbreaking watsonx platform, encompassing AI studio, data store and governance toolkit, empowers clients to accelerate and scale AI across various use cases. This enterprise-ready platform democratises AI, making it more mea-biz.com

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AI IN BANKING

accessible for businesses of all sizes to design and deploy accurate, scalable and adaptable solutions. As businesses transition from +AI to AI-first, watsonx, with its 10-year roadmap, stands as a significant stride toward delivering on the vision of democratising AI and driving positive impacts on economic growth in the Middle East.

How does IBM work with banking and finance clients to ensure the best outcomes from AI?

IBM advises financial institutions to go after areas where they can see quick gains in productivity and time to value – augmenting and automating talent acquisition, management and support, enhancing customer service, automating

and minimising errors, AI boosts cost efficiency and productivity. Moreover, AI’s contribution to compliance is significant, automating monitoring and reporting processes to mitigate non-compliance risks. The ability to adapt rapidly to market dynamics and evolving customer expectations is facilitated by AI’s analysis of vast data volumes, enabling informed decision-making.

IBM’s collaboration with leading financial institutions further demonstrates its commitment to driving impactful transformations. Partnerships with First Abu Dhabi Bank, Dubai Islamic Bank and Emkan Finance highlight a diverse range of initiatives. For First Abu Dhabi Bank, the collaboration focuses on modernising digital infrastructure, while Dubai

IBM’s approach is characterised by a deep understanding of client needs, a commitment to innovation and strategic collaborations, ensuring that AI for business solutions are tailored to deliver the best outcomes for banking and finance clients

app modernisation and IT Ops and bolstering security. We focus on use cases that are scalable and relevant to banks, insurers, financial markets and other financial services industry stakeholders.

We see big potential with foundation models – which are reusable and require minimal training – in helping leaders implement AI to radically change how their businesses operate. In the realm of AI and automation, IBM plays a pivotal role in enhancing banking operations across various fronts. By streamlining operations, automating repetitive tasks,

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Islamic Bank leverages IBM Consulting to accelerate its data transformation journey. Emkan Finance’s collaboration aims at developing digital financing products for SMEs in Saudi Arabia, fostering growth and risk management through digital technology.

IBM’s approach is characterised by a deep understanding of client needs, a commitment to innovation and strategic collaborations, ensuring that AI for business solutions are tailored to deliver the best outcomes for banking and finance clients.

Business News for the MEA region

How will the deployment of AI change human capital in the regional financial sector?

AI is marked to bring about transformative changes in the human capital landscape within the regional financial sector. The findings of a recent IBM Institute for Business Value study about the workplace in the era of generative AI reveals that UAE Executives estimate that 40% of their workforce will need to reskill as a result of implementing AI and automation over the next three years.

The recent introduction of IBM watsonx has ushered in new possibilities in Generative AI, and we are witnessing its impact in two distinct ways: firstly, trusted AI is supporting the automation of routine business processes and secondly, AI is assuming the role of a creative partner, fostering innovation.

In the realm of human resources, AI, exemplified by Watson Orchestrate, is streamlining talent acquisition, promotion and retention processes. For instance, within IBM’s Consulting business unit, this implementation resulted in significant time savings, with 12,000 hours saved and an 85% reduction in the promotion cycle duration. This liberated the workforce to focus on essential talent-related services, emphasising the shift from routine paperwork to thoughtful and creative input.

As AI increasingly manages monotonous tasks, a symbiotic relationship between humans and technology emerges. This evolution leads to enhanced productivity, the development of new roles cantered around AI implementation and management and the acceleration of tech disruptions. The long-term impacts include heightened efficiency, innovation and the ability to address complex challenges.

However, the integration of AI comes with ethical considerations, such as data privacy and algorithmic bias, necessitating vigilant management. Continuous reskilling efforts will be crucial to ensuring the workforce remains adaptable to evolving AI capabilities in the face of rapid technological advancement.

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Welcome aboard!

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5/18/22 4:25 PM