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November 7, 2017
Entry of Kuwait’s Jazeera Airways into the Indian market – will the move fly?
Jazeera Airways Snapshot Type Scheduled Airline Base Kuwait Aircraft 7 Destinations 18 Routes 17 Daily Flights 23 Source: ch-aviation Why Jazeera entered the Indian aviation industry? Low oil prices for the past couple of years have generally led to surging profits in aviation industry globally as spending on fuel, the major component of cost structure, dropped sharply. However, it is a game of double-edged sword in the context of Gulf airlines. Lower fuel costs...
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October 15, 2017
GCC Air quality – Are government measures sufficient?
Air Quality – Cause for concern The extent of air pollution is higher than the global average in all GCC countries with Qatar and Saudi Arabia having alarming levels of PM2.5. As per a study by WHO, Saudi Arabia accounted for 4 among the top 50 cities having the highest average yearly air pollution with Riyadh and Jubail making it to the top 10. The situation is equally worse in terms of CO2 emissions as Qatar ranks 1st in the...
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October 8, 2017
Is education still a good business in the GCC?
Challenges faced by GCC education industry Despite the growing government spending on education by gulf countries averaging 15.8% of government expenditure in GCC, the quality of education remain below par to global standards. It is reflected in high level of unemployment among youths with an unemployment rate as high as 27% (World Economic Forum). While Gulf governments may be eager to prioritize the hiring of nationals particularly in the private sector, a significant gap in skillsets and cultural and structural...
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September 20, 2017
Move towards renewables – Where is the problem?
The total power generated through renewables in the GCC has grown from a meagre 20 GWh in 2010 to 620 GWh in 2015. But looking at the bigger picture, it constitutes to less than 1% of the total power generated in the region while the global figure is at 23.3%. Europe and North America stand at 34.2% and 22% respectively in 2016 with Norway leading the way with 97.87%. Norway has long been a pioneer in renewables with focus on...
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September 13, 2017
UAE F&B Sector – What are the pain points?
The total outlets in UAE for food services were 16,000+ in 2015 which is expect to expand by 17.4% annually to reach 19,000+ by 2020 (KPMG report). The market size for food and beverage (F&B) in UAE was measured at USD 14.27Bn and is expected to grow at a CAGR of more than 9% to reach USD 22.32Bn by 2020. While an affluent population with more mouths to feed is a positive indicator for the economy and for the F&B...
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August 27, 2017
GCC Aviation in turbulence – Quo Vadis?
Table: YoY revenue and net income change for major GCC airlines (2015 vs 2016) YoY change (2015 vs 2016) Revenue Net Income Emirates 0% -82% Etihad -22% NM Qatar Airways 4% 30% Oman Air 1% NM Jazeera -10% -35% Air Arabia -1% -4% Source: Annual reports NM indicates losses during the period considered Full Service carriers facing more trouble compared to low cost carriers Emirates, the largest airliner in GCC faced pressure from increasing competition and poor travel demand in...
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July 5, 2017
KSA Insurance: Is it ripe for consolidation?
In Saudi Arabia, there are more than 35 companies that are licensed to provide insurance services, further there are 150+ companies that offer insurance support services and allied activities. Together, they generated business, as measured by gross written premium, worth USD 9.9bn last year. However, the profitability of the sector remains low and inadequate. Almost half of the companies reported losses and even among those that reported profits, less than half of them were able to earn higher returns than...
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May 25, 2017
Healthcare in Saudi Arabia – where are the opportunities?
The government is benevolent to the extent that it pays for all medical charges even outside the country if it is deemed necessary for a patient to travel abroad for advanced healthcare facilities. Saudi’s healthcare system is comprised of three service providers – the Ministry of Health (MoH) hospitals, government hospitals and private hospitals. However, gaps are evident in the services offered to the people. The kingdom is projected to require 15,888 beds in 2018, accounting for almost 50 per...
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May 14, 2017
GCC Petrochemical Industry: Move beyond cheap feedstock
The main source of current GCC feedstock is ethane which, along with methane, is naturally found in associated gas. Other significant feedstocks includes propane and butane, both of which are derived from LPG. Lastly, there is naphtha, which is a product of crude oil refining. In contrast it is important to highlight that Naphtha’s contribution in Global feedstock consumption is around 70% in the year 2015, according to Platts. GCC has a significant cost advantage in feedstocks as compared to...
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April 13, 2017
Saudi Arabia Insurance: Untapped Potential offers Fast Paced Growth Opportunities
Despite Saudi Arabia’s huge population and the growth witnessed over the past few years, the penetration levels of were lower than UAE and Bahrain. Lower penetration and favourable government policies would serve as strong growth factors. Market Size of Insurance Industry Saudi Arabia Insurance has a penetration rate of mere 1.5% in 2015 and compared with the developed nations is grossly under insured. With a large population of 32 Mn and strong GDP growth of over 3% there is a...