Neom gets USD 3 bn in loan guarantees from Italian state export credit agency

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What we're tracking today

TODAY: Qatar or Abu Dhabi to buy Pakistan International Airlines + Air cargo traffic is set to double by 2043 -Boeing

Good morning, everyone. We have a relatively busy issue to close out the week, with updates on Saudi Arabia’s megaproject Neom, Oman’s Shinas Port, DP World’s subsidiary P&O Ferries, and more. Let’s dive in.

HAPPENING TODAY-

The Bahrain International Air Show is on its second day today, and will run through Friday, 15 November in Bahrain. The event gathers key regional industry leaders and experts to network and showcase technological advancements in the aviation industry to buyers around the world.

WATCH THIS SPACE-

#1- Pakistan International Airlines could be sold to Qatar or Abu Dhabi: The Pakistani government could sell a majority stake in Pakistan International Airlines to the government of Abu Dhabi or Qatar, as it moves forward with its plan to privatize the flag carrier, Pakistani news outlet Aaj reports. Takeover proposals, with pre-agreed conditions, are already underway, the outlet reports. The Pakistani government is accepting expressions of interest for the sale until 30 November.

Background: The government-to-government sale comes after the airline received only a single bid of PKR 10 bn (USD 36 mn) for a 60% stake in the bidding process — below the minimum price set by the government. The bid was submitted last month by a consortium led by Pakistani real estate developer Blue World.

#2- Air cargo traffic is set to double by 2043, with a rise of 4% per year, on the back of growth in emerging markets, Boeing said in its 2024 World Air Cargo Forecast (WACF)report (pdf). East and South Asian markets are projected to witness the swiftest air cargo traffic increase per year, with the Asia-Pacific fleet alone expected to nearly triple in size. India’s domestic air cargo market is slated to quadruple to address growing e-commerce networks.

The breakdown: The global air cargo fleet is expected to increase to 3.9k freighters by 2043, up from 2.3k in 2023, with large widebody freighter fleet projected to nearly double. Of these new deliveries, almost half will go towards replacing retiring freighters, integrating more capable and fuel-efficient models.

More express carriers expected: Growth in the e-commerce sector and its supporting distribution networks is expected to drive express carrier demand to grow faster than the industry average, with express carriers forecasted to serve 25% of the air cargo market by 2043, up from the current 18%.

#3- Airbus is looking to double its industrial activities in the UAE over the next decade, a plan that includes developing a base of local experience and curated talent, Airbus Air Power Head Jean-Brice Dumont told Wam. Durmont added that Airbus currently equips all its aircraft with UAE-made parts, distinguishing the nation as a key player in the aviation sector. The aircraft manufacturing titan is keen to strengthen its existing partnerships with UAE-based firms including Edge Group, EPI, and Strata, Durmont said.

MARKET WATCH-

#1- Oil prices rebounded slightly this morning after falling to their lowest level in two weeks on Tuesday, after Opec+ cut growth forecasts for global oil demand for the fourth month in a row, Reuters reports. Brent crude futures were up 0.5% to USD 72.28 a barrel, while US West Texas Intermediate crude (WTI) futures gained 0.5% to USD 68.43.

#2- Baltic index breaks its streak: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — fell 0.2% yesterday, ending a six-day streak of gains. The capesize index eased seven points, while the panamax index gained 14 points and the smaller supramax shed 15 points.

DATA POINT-

Abu Dhabi’s SMEs boost exports in 2024: Some 14 SMEs participating in the Abu Dhabi Department of Economic Development’s (Added) SME Export Matching Program reported a 44% y-o-y increase in their exports in 2024, with total exports expected to hit AED 387 mn, according to a statement.

About the program: The initiative links participants to over 800 strategic stakeholders in a number of countries, including Saudi Arabia, Oman, Kuwait, Bahrain, Qatar, Egypt, the US, India, and Canada.

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CIRCLE YOUR CALENDAR-

Egypt will host the Autotech Exhibition on Sunday, 17 November until Tuesday, 19 November in Cairo. The event will bring together prominent local and international companies to discuss and evaluate the latest developments and trends in the automotive aftermarket and feeder industries.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.

Italy’s Sace pledges USD 3 bn in loan guarantees for Neom, paving the way for Italian transport firms to operate there

Italian state export credit agency Sace pledged USD 3 bn in loan guarantees to Neom, providing 80% guarantees for international bank loans backing the megaproject, Bloomberg reports, citing people with knowledge of the matter. The story was also picked up by Reuters.

Italy is thinking ahead: The Italian government believes that the loan guarantees could open the way for Italian infrastructure, construction, and transport firms to clinch valuable contracts in Neom, sources told Bloomberg. Sace — which is run by Italy’s Finance Ministry — opened a branch in Riyadh earlier this year and Italian Prime Minister Giorgia Meloni may visit the Kingdom next, the business news information services said. Italian engineering outfit Webuild SpA is a contractor at Neom, grabbing a USD 4.7 bn contract for developments at Trojena and a high-speed railway.

Neom needs the boost: The ambitious project was initially budgeted at USD 500 bn, but many analysts believe its costs significantly exceed that projection. A string of budget deficits and declining oil prices have also limited the funding available for the megacity, as Riyadh recalibrates spending towards megaprojects that are smaller in scale.

Oman’s Shinas Port inks USD 66 mn agreement for fuel tanks

Shinas Port getting new fuel storage tanks: Oman’s QSS Maritime — the operating firm at Oman’s Shinas Port — inked an RO 25 mn (c. USD 66 mn) agreement with Zuhoor Al Khaleej to build fuel tanks and manage supply and storage services at the port, Omani news agency ONA reported. The agreement involves the construction of tanks with more than a 100k-tonne capacity per liter.

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Lots of action around Shinas Port: A Omani and Indian consortium inked an agreement last year with MTCIT to develop, manage, and operate Shinas Port. Oman later launched a new maritime line linking Shinas Port to Iran’s Bandar Abbas Port in August. Oman’s Sohar Port and Freezone also inked an agreement to set up a vessel servicing at the port with Al Risia Subsea Engineering & Service, Gulf Global Land & Sea Services, and National Marine Services.

DP World extends GBP 365 mn in loans to subsidiary P&O Ferries

P&O Ferries lands multi-mn loans from DP World amid financial and political strain: Port operator DP World has extended a series of loans worth GBP 365 mn to subsidiary P&O Ferries since 2022, the Financial Times reports, citing filings it has seen. The loans were handed out after the subsidiary incurred GBP 249 mn in losses due to breaches on external debt clauses and contention over the firing of 800 shipping workers. It has since repaid the debt.

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Refresher: DP World initially took over the formerly London-listed P&O in 2006 for GBP 3.3 bn, 70% above market value. Soon after, DP World offloaded the ferry operator to state-owned Dubai World, before buying P&O back in 2019 for GBP 322 mn.

The restructuring and ensuing losses saw the British shipping firm turn to DP World, its sole shareholder, for a series of loans in 2022, the latest of which was a “temporary” loan of GBP 76.9 mn in April, set to be paid off with the money P&O will get from the sale of its ferry, the Spirit of Britain. Built at a cost of GBP 157 mn, the ship was sold in May for EUR 89.4 mn to Irish Continental Group by DP World France SAS, the port operator’s French subsidiary, which had previously owned the ferry.

The French DP subsidiary stepped in to help support P&O’s balance sheet: In 2022, the French DP World subsidiary took over P&O’s financing obligations for ships under construction, which were then leased back to P&O under charter agreements.

UAE’s EMX leases 6.5k sqft logistics warehouse in Sharjah Airport International Freezone

EMX to set up shop in SAIF Zone: The UAE’s Sharjah Airport International Freezone (SAIF Zone) has inked a lease agreement with 7X’s courier and parcel arm EMX for the use of a new 6.5k sqft logistics warehouse in the zone, according to a statement. The firm will integrate digital solutions and advanced logistics systems at the new site to boost accuracy and efficiency.

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REMEMBER- 7X, known as Emirates Post Group before its rebranding earlier this year, launched EMX in efforts to heighten focus on delivery and courier solutions. EMX has been looking to expand its reach by adding new destinations since July. The firm currently operates a fleet of more than 600 couriers and 10 delivery centers.

ICYMI: 7X inked an MoU last month with geo-intelligence firm Urbi to integrate the latter’s geographic information system (GIS) technology in its operations. Urbi will integrate its mapping and geospatial technologies into the operations of 7X’s entities including EMX.

Going global: EMX launched a new global service in July for ecommerce package delivery, dubbed EMX International, across the GCC region. The delivery platform helps companies serve customers in KSA, Oman, Bahrain, Qatar, and Jordan.

Adnoc Logistics and Services had a good 3Q

Adnoc Logistics and Services saw its bottom line grow 18% y-o-y to USD 175 mn in 3Q 2024, while revenues grew 32% y-o-y to USD 928 mn, according to its earnings release (pdf). On a 9M basis, net income increased 27% y-o-y to USD 576 mn, while revenues grew 38% to USD 2.7 bn.

Driving growth: The company saw increased revenues from its shipping segment on the back of strong charter rates for tankers and dry bulk, as well as additional revenues from newly acquired carriers. Its services segment also saw improvements on the back of increased volumes in petroleum port and onshore terminal operations.

Looking ahead: The Adnoc subsidiary’s acquisition of Navig8 is set to boost earnings per share by at least 20% in the first full year. The acquisition is set for completion by the end of March 2025.

Iran, Beijing investment promotion councils ink MoU to to expand trade collaborations

TCCIMA + CCPIT Beijing sign agreement to expand trade cooperation: Iran’s Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA) has inked an MoU with China’s Council for the Promotion of International Trade Beijing Sub-council (CCPIT Beijing) to expand trade cooperation, Tehran Times reported.

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China to invest in Iran: The two parties discussed creating new fields of collaboration in “clean energy, nanotechnology, artificial intelligence, joint production of electric cars, development of digital infrastructure and specialized tourism,” Iran’s ambassador to China Mohamed Najafi Arab said on the sidelines of TCCIMA’s visit to the China International Expo in Shanghai.

Etihad Cargo snags Best International Cargo Airline award

Etihad Cargo bags Arabian Cargo Award: Etihad Cargo has snapped up the award for Best International Cargo Airline at the Arabian Cargo Awards, according to a company LinkedIn post. The company said the award reflects its commitment to innovation, reliability, and customer satisfaction.

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DP World opens London Gateway berth

SHIPPING + MARITIME-

DP World opens London Gateway berth: DP World has opened its first all-electric berth at London Gateway, Maritime Gateway reports. The new 430 meter berth increases port capacity by more than a third. The berth has an all electric fleet with automated stacking cranes, straddle carriers, and four of the biggest dock cranes in Europe.

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Expansion plans: DP World wants London Gateway to be the biggest container port in the UK in terms of trade volumes within the next five years. The firm committed GBP 1 bn (c. USD 1.3 bn) in investments last month for the port.

ZONES-

Delmon Industrial Complex to set up plant in Kezad: Saudi-based Delmon Group’s Delmon Industrial Complex has signed a 50-year lease agreement with Abu Dhabi’s Khalifa Economic Zone (Kezad) for an AED 50 mn oil and gas plant in Kezad’s ICAD III (Kezad Musaffah) area, Wam reports. The plant, covering 59k square meters, will engage in exploration, extraction, and refining activities to process minerals and manufacture and supply products for oil and gas companies in the region and beyond, according to the newswire.

PORTS-

PCFC debuts technical framework for ports: Dubai’s Ports, Customs, and Freezone Corporation (PCFC) has launched the Dubai Code for Ports, a framework of technical specifications and requirements for the development and management of ports, marinas, and other maritime operations in Dubai, according to a statement. The framework covers essential areas like soil inspection, dredging, land reclamation, water drainage, and breakwater design. The project also aims to set a benchmark for customs warehouses, PCFC CEO Nasser Al Neyadi said.

DATA CENTERS-

Beeah, Khazna, SCTA team up to launch the largest Tier III data center in Sharjah: UAE-based environmental services provider Beeah Group, Khazna Data Center and the Sharjah Communication Technologies Authority (SCTA) will set up the largest Tier III data center at the Sharjah Freezone for Communication Technologies in Kalba, among other data centers across the emirate, Wam reports. Khazna Data Centres will develop the facilities, while the SCTA will provide regulatory support, allocate land, and establish energy infrastructure.

AVIATION-

Cluster2 to implement advanced air mobility solutions at its airport network: Cluster2, a subsidiary of Saudi airports operator Matarat Holding, partnered with Italian vertiport network operator UrbanV to build an advanced air mobility ecosystem across Cluster2’s airport network, which currently has 22 airports, according to a statement from UrbanV. The partnership will also see the launch of pilot programs for electric vertical take-off and landing (eVTOL).

OTHER STORIES WORTH KNOWING THIS MORNING-

BIA getting a new cargo facility: Bahrain Airport Services (BAS) has inked an agreement with Dubai-based firm ALS Logistics Solutions to develop a new 29k sqm cargo facility at Bahrain International Airport. (Al Watan)
Mawani adds new shipping service: The Saudi Port Authority (Mawani) has added a new shipping service by Emirates Shipping Line — dubbed EIX — connecting the Kingdom to Egypt, Turkey, and India with a 1.8k TEU capacity. (Statement)

Spirit Aerosystems to receive funding from Boeing + Airbus, Canada’s gov’t intervenes to end port shutdowns

Spirit Aero to raise funds from Boeing + Airbus: Spirit Aerosystems will receive up to USD 350 mn from Boeing and up to USD 107 mn from Airbus in advance payments to help it stay afloat, as it continues to burn through cash after four consecutive years of losses, Reuters reports. The company is expected to burn through USD 450-500 mn over the last three months of 2024 and 1H 2025.

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Spirit Aero has been facing inventory pile ups and delivery slumps in recent weeks, following the now-settled strike at Boeing. The US planemaker is currently trying to revive production through Spirit Aero, while Airbus depends on them for important parts for the A350 and the A220 jets, according to Reuters. Airbus has warned that delays in parts delivery could hurt A350 deliveries in 2025.

We saw this coming: Boeing was close to a funding agreement earlier this week with Spirit Aerosystems to help them with their finances and fix Boeing’s supply chain issues while reviving its jet production. This came after Spirit Aero voiced concern about not being able to pay its investors within the next 12 months.

ICYMI- Boeing agreed to acquire Spirit Aero for more than USD 4 bn in June. Boeing paid USD 37.25 per share for the firm.

Canada forces end to port work stoppages: Canadian Labor Minister Steven MacKinnon has ordered binding and final arbitration between labor unions and ports ownership to end work stoppages in the ports of Vancouver, Prince Rupert, and Montreal, CNBC reports. The existing collective agreements will remain in place pending a new agreement between dockworker unions and the ports. Negotiations had hit a “total impasse” and if the work stoppages had gone on, they would have affected some USD 1.3 bn in goods, MacKinnon said.

The repercussions of the strike: The strikes impacted both Canadian coasts, with trade to the US possibly taking weeks to recover, as almost 20% of US trade arrives in Canadian ports of Vancouver and Prince Rupert.

ICYMI- Unionized workers launched a strike last week at two Termont-run terminals at Montreal Port, which are responsible for handling 40% of the port’s container traffic. The unlimited strike was called after talks for a new labor contract failed. The Maritime Employers Association called on Minister MacKinnon to intervene and bring back workers and employers to get back to the negotiating table.

IN OTHER CANADA NEWS-

Ontario premier proposes US-Canada trade agreement without Mexico: Ontario, Canada’s largest province, is looking to form a North America trade agreement with only the US if Mexico fails to impose harsher regulations on Chinese imports, Bloomberg reports. “We must prioritize the closest economic partnership on earth by directly negotiating a bilateral US-Canada freetrade agreement that puts US and Canadian workers first,” Ontario Premier Doug Ford said in a post on X.

Behind the blockout: Mexico is being criticized for its lack of alignment with US and Canadian policy on Chinese trade, as they should “at the very least” match the pair’s tariffs, Ford said. Mexico “shouldn’t have a seat at the table to enjoy access to the largest economy in the world,” Ford added.

Background: Canada has slapped a 100% tariff on Chinese EVs and a 25% tariff on Chinese steel and aluminum. This mirrored a similar move by the US and the EU. Tariffs apply to all EVs shipped from China including Tesla vehicles.

Calendar

NOVEMBER

13-15 November (Wednesday-Friday): The Bahrain International Airshow, Sakhir Airbase, Bahrain.

13-15 November (Wednesday-Friday): ITC North-South – New Horizons, Astrakhan, Russia

18-20 November (Monday-Wednesday): The Heavy Equipment and Truck Show, Damman, Saudi Arabia.

19-21 November (Tuesday-Thursday): Saudi International Maritime Forum, Dammam, Saudi Arabia.

18-19 November (Monday-Tuesday): G20 Summit, Rio de Janeiro, Brazil.

20-21 November (Wednesday-Thursday): Saudi Rail Exhibition, Riyadh, Saudi Arabia.

29 November (Friday): Egypt and Italy to launch a ro-ro shipping line connecting Damietta Port with Port of Trieste.

DECEMBER

2-3 December (Monday-Tuesday) Wings of Change Middle East, Riyadh, Saudi Arabia.

10-11 December (Tuesday-Wednesday): Rail Industry Summit, Casablanca, Morocco.

10-12 December (Tuesday-Thursday): Middle East Business Aviation, Dubai, UAE.

20 December (Wednesday): The Iran-Senegal Joint Economic Cooperation Commission, Dakar, Senegal.

EVENTS WITH NO SET DATE

IATA Annual General Meeting (AGM) and World Air Transport Summit, New Delhi, India.

1H 2024: Civil Construction subcontracts for construction firms in Oman for implementation of the Abu Dhabi – Suhar rail link to be announced.

2H 2024: Bahri’s barges for Saline Water Conversion Corporation (SWCC) to begin initial and commercial operation.

King Salman Energy Park is set to become operational.

The Cross-Border Digital Trade Forum, Dubai.

2025

2Q 2025: ICAO Facilitation Conference 2025 (FLAC 2025), Dohar, Qatar.

FEBRUARY

4-5 February (Tuesday-Wednesday): Seatrade Maritime Qatar, Doha, Qatar.

APRIL

16-17 April: Global Ports Forum, Dubai, UAE.

Mid-2025: Iraq will complete phase one of the construction of the Grand Faw Port.

DHL and Aramco’s logistics and procurement hub in Saudi Arabia will commence operations.

AD Ports-operated Safaga Port’s multi-purpose terminal will become operational.

Phase 3 of APM Terminals Tangier MedPort to be complete and operational.

1Q 2025: Sadr Park’s Logistics Center in Riyadh to be completed.

1Q 2025: Phase twoof Jafza Logistics Park to be completed.

NOVEMBER

4-6 November: The International Air Cargo Association TIACA’s Air Cargo Forum 2025, Abu Dhabi, UAE.

2026

2026 UNCTAD Global Supply Chains Forum, Saudi Arabia.

2027

4Q 2027: Oman’s Musandam Airport construction to be completed.

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