Positive Signs & Economic Recovery

Although stricken by a global credit crunch, decisions of Dubai Govt. are reposing a positive sign towards the recovery of economy. It all happened during Dubai Air Show 2011.

According to the Boeing Media Center, Emirates airline has announced an order of 50 777-300ERs with an option of 20 additional air crafts purchase order. The order valuing $ 18 Billion is the single largest commercial airplane order in Boeing’s history.  Additional option of 20 jets will make this deal totaling $ 26 Billion. Thus to Park this army of jets, Emirates do need a bit more space at DXB.

 "The 777's reliability, performance and operating economics have firmly established it as the backbone of our fleet," said His Highness Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline & Group. "We have an ambitious and strategic plan to continue growing our international network and especially increasing our long-haul, non-stop routes.  This order supports our fleet expansion and reiterates our commitment to operating a modern fleet for the benefit of our passengers and to ensure operational efficiency as well."

DXB airport is designed to receive 60 million passengers daily. It is expected that 51 million passengers will pass through DXB in 2011. Thus work is under process to increase the capacity of present airport to 90 million by 2018. Also the construction of DWC (Dubai world Central) is under way, which will guarantee the capacity of 160 million. It also plans to hold the Dubai Air show 2013 and is currently providing support to a number of cargo flights. By the end of 2020, whole operations of Emirates airlines are planned to be shifted to aforesaid destination.

On the other hand, the deadlock related to the expansion of overcrowded Heathrow is yet to be solved. The two oppositions, the conservatives and the Labours have joined their hands to oppose the construction of third runway. Any other option will take years of planning and committees.

Paul Griffiths, the chief executive of Dubai airports, is confident that Emirates, Ittihad and Qater Airways are in a strong position, to grab the market share from traditional commercial airlines. So all Dubai got to do is to expand, because the growth plans of home liners are “so audacious”. 

Redesigning Euro

The euro zone, since the crisis, has witnessed several skirmishes between the politicians and the Market Players. The situation will get more severe in 2012. Sounds Dangerous, but politics should be kept aside if Eurozone want a permanent solution to prevailing financial crises. All the Eurozone countries are now heading towards deficit cutting, reducing the expenditure on public services like health benefits etc. Any wrong step, at this stage, would lead to a financial disaster, unimaginable.

With the loosing value of stock capital and Govt. bond yields, Major financial institutions of Europe are in a difficult situation, as they want a financial rescue at any cost from Germany and other financial worthy Eurozone partners. This eventually put the politicians in a bargaining position, as they also want a price or some sort of financial guarantee for this prospective bailout. Now it’s the Eurozone which has to decide whether it wants to continue the affairs, as they are or change the governance system of euro; with later being a highly uncertain and unlikely option. But Germany, along with fellow members, is sure to devise the strategy for this bail out and the euro governance mechanism in 2012.

Many options are available for the euro zone leaders like establishing a mini European monetary fund with enough funds to cater the needs of crises struck countries, a homogeneous monetary policy, acceptable to all European countries, a pan European banking regulatory Authority, which should regulate the bailout process, centralized borrowing, not to mention a Govt. expenditure regulating body, which would require the governments to submit their fiscal policies or the combination of any two or more of these above options.

France and Germany mistrust European commission whereas other countries dislike European parliament and an intergovernmental council. Also there is a suspicion over the involvement of a centralized commission in the fiscal spending, which leaves a big question in mind that which institution will hold the supreme authority in regulating the Eurozone crises. Thus an environment of mistrust and inkling among the Eurozone members can spoil the 9 year long hard work, towards the establishment of United States of Europe.

Apart from twice-yearly summits and the establishment of EMF (European Monetary fund), more is needed in the form of new sanctions such as debt caps, independent information and data disseminating and regulating departments. All these options need a new treaty, which would require a time involving exercise, which Eurozone cannot afford, as time is running out.

To sum up, harsh steps must be taken to regulate the monetary affairs or else Europe should get itself ready to face the next currency crises in 2012.