TheChek News Flow

Deals for over 100 aircraft on first day of Dubai air show cement industry rebound despite regional tensions

Middle Eastern airlines have placed orders worth tens of billions of dollars for more than 100 aircraft on the opening day of the Dubai air show, underscoring the rebound in the aviation industry even as regional tensions run high. 

Emirates, the local carrier, placed an order for 90 of Boeing’s coming 777X aircraft, the world’s largest twin-engined jet, valued at $52bn at list prices. Its low-cost sister airline, Flydubai, followed up with an order for 30 Boeing 787-9 Dreamliners, the first widebody aircraft in its fleet. The US plane maker also picked up a commitment from Royal Jordanian for its 787 wide-body.

The flood of orders comes despite concerns over a fall in demand for air travel in the region due to the conflict between Israel and Hamas. 

Bookings for flights to the Middle East fell in the three weeks following the Hamas attacks on Israel, dropping from 13 per cent above 2019 levels to 13 per cent below, according to industry data provider ForwardKeys.

Sales for flights from the region fell 10 percentage points.

Yet demand for the industry’s biggest jets is soaring after a prolonged downturn following the coronavirus pandemic, which severely dented long-haul travel. 

Much of the demand is expected to be driven by Middle Eastern airlines over the next two decades. Boeing is forecasting that wide-body aeroplanes for long-haul travel will make up 45 per cent of deliveries to the region over the next 20 years — the highest regional percentage worldwide — as it expands into an international transit hub. 

The US group projects delivery of 3,025 new commercial aircraft in the Middle East by 2042, including 1,350 wide-bodies. 

“The big Gulf carriers continue to believe strongly in the superconnector model and therefore anticipate some growth,” said Edmond Rose, an aviation consultant who works in the region.

“If you believe there is going to be growth in air travel because of global economic expansion then those Gulf carriers are still going to be well placed to pick up some of that.”

Middle Eastern airlines are forecast to grow over the next two years, and reach 115 per cent of pre-pandemic capacity by 2025, a stronger recovery than any other region, according to the International Air Transport Association, a trade body. 

Regional profitability is forecast at $9.41 net profit per passenger this year, in line with the US and more than double that of European carriers.

Beyond the Middle East, Boeing won an order for 90 of its narrow-body 737 Max jets from Turkey’s SunExpress, while European rival Airbus reached an agreement in principle with Turkish Airline for what it said was a “significant commercial aircraft order”, understood to be for as many as 355 jets. 

Airbus also agreed a follow-on order for 30 of its A220-300s single-aisle jets with Latvian carrier airBaltic.

Industry analysts said they expected more orders to come at Dubai this week as airlines jostle to lock in delivery slots from both Boeing and Airbus. 

Airlines are having to replace older aircraft in their fleets as well as place orders to support future growth, said Stuart Hatcher, chief economist at consultancy IBA, who predicted significant deals at the show.

Order backlogs for the two plane makers are at record highs, totalling more than 13,900 aircraft to the end of October, according to data from Cirium, the aviation consultancy. 

“I am not sure where the [manufacturers] are finding slots for these and I suspect there is a significant amount of slot double booking going on as [they] gamble on some customers seeking to rearrange delivery slots, perhaps in 2026 and later,” said Rob Morris, head of Cirium’s consultancy business Ascend. 

Chinese experiment raises hopes for viability of mission to red planet and planetary colonisation

A robot has used meteorite extracts from Mars to help make oxygen from water, melding artificial intelligence’s powers of chemical discovery with efforts to explore and even populate the red planet.

The automated experiment boosts the possibility of sustaining future manned outer space missions, according to the paper published on Monday in Nature Synthesis. The authors estimated that it would have taken 2,000 years of human labour to achieve the same result by trial and error.

The AI robot used the rock samples to make a catalyst — a substance that speeds up chemical reactions — to produce oxygen from water. The work, from a multidisciplinary team at the University of Science and Technology of China in the eastern city of Hefei, taps into rapidly growing interest in colonisation of the cosmos and possible exploitation of extraterrestrial resources. 

“The biggest implication is that an AI-guided robot is able to produce useful chemicals in unknown conditions with unknown materials,” said Prof Jun Jiang, a co-author of the Nature Synthesis paper. “My dream is maybe we can send several robots, to the Moon firstly, and start to use the local resources to prepare the necessary chemicals and materials for human beings.”

“There’s no more important resource than oxygen to breathe,” said Charles Cockell, professor of astrobiology at the University of Edinburgh, who was not involved in the research. “This is a thrilling example of how we can send robots to Mars and have them extract minerals that catalyse oxygen production from abundant Martian ice, making it possible for us to build a permanent self-sustaining settlement.”

The researchers tasked their robot with making materials capable of producing oxygen from water sources that previous research had identified on Mars. The team gave the automated chemist five different meteorite samples to use to design a catalyst.

Within six weeks, the robot analysed 243 experimental data sets and almost 30,000 theoretical simulations to pick and synthesise a viable six-metal catalyst from 3,764,376 possible formulas. The researchers successfully conducted the experiment at Martian temperatures of minus 37C. They demonstrated they could run the operation remotely, by setting up and controlling similar laboratories in three Chinese cities ­­hundreds of kilometres apart.

A video accompanying the new paper shows the AI chemist shuttling solo between workstations to produce the materials needed to generate oxygen. The scene has echoes of the 1972 film Silent Running, in which the robot Dewey tends the last remnants of earth’s life-giving forests in a capsule hurtling through deep space.

Countries such as China and the US are increasingly interested in both AI and space science. Elon Musk, the SpaceX founder, has longstanding plans for a mission to Mars.

But huge obstacles to colonising other planetary bodies remain. Remote AI laboratories and manufacturing would need high process efficiency and considerable computing power, either in situ or off-planet. In the case of Mars, the set-ups would have to be resilient to much higher levels of radiation than penetrate Earth’s atmosphere.

The Martian rock research, nonetheless, raised many interesting possibilities, said Dr Stephen Thompson, a planetary expert at Diamond Light Source, the UK particle accelerator. These include that an AI laboratory could act as an interstellar “filling station” for spacecraft by capturing hydrogen left over after the extraction of oxygen from water.

The paper represented another advance in the fast-developing field of using AI for materials discovery, Thompson added.

“AI is making great strides because it can process huge amounts of data,” Thompson said. “It’s highly efficient in identifying new materials in a way that would take humans year and years to do.”

The research’s combination of chemistry, robotics and software design was “really cool”, said Mark Symes, professor of electrochemistry and electrochemical technology at the University of Glasgow.  

“That’s what we are going to need if we’re going to colonise Mars — all the disciplines,” said Symes, who wrote a separate commentary on the research, also published in Nature Synthesis. “We will need materials wherever we live — and we are going to get them through chemistry.”

Nervous tinkering will have little impact on deals and stock market valuations

Flip flops look good on a beach, but bad in politics. So it is easy to see why the UK’s plan to pare back recently introduced powers to screen foreign takeovers is inspiring snarky comments. This seems like the umpteenth attempt to revive London’s moribund stock market, this time by making M&A easier.

The Takeover Panel, the UK’s statutory mergers and acquisitions umpire, has slipped into a loss. It is financed by fees on deals and filings. City types blame red tape for sapping animal spirits. The government obligingly ditched beefed-up governance legislation last week.

Deal doers should also welcome changes to the National Security and Investment Act. This was too broad when it came into force in 2022. Mooted changes appear sensible enough, even amid rising geopolitical tensions.

The NSI is similar in inspiration to US Cfius national security legislation and some EU laws. It mandates any buyer who acquires significant control — say 25 per cent — of a company operating in any of 17 strategic sectors to notify the authorities. In addition, the government can review virtually any transaction it feels concerned about, even if it falls outside designated sectors. 

Oddly, the NSI lacks a minimum size threshold. Even the acquisition of a company with no revenue falls under its remit. Buyers do not need to be foreign to attract scrutiny. Even internal reorganisations are caught in the net. 

As a result, in the year to March 2023, the UK had 866 notifications under the NSI. That is almost double annual notifications in the US, points out Veronica Roberts, a partner at law firm Herbert Smith Freehills.

Less than 2 per cent of deals that were notified required conditions or triggered prohibition, according to analysis by Ian Giles, a partner at Norton Rose Fulbright. In contrast, almost 15 per cent of deals reviewed across the EU were either mitigated, prohibited or withdrawn.

That suggests that the UK net catches too large a flock of butterflies. Careful rewording should hone the NSI’s scope, reducing the legal costs of companies and investors.

It would, however, be foolish to imagine that nervous tinkering will have any impact on M&A and stock market valuations. London has been enervated by Brexit, witch hunts against business, and economic uncertainty. A government with little hope of reviving itself has no hope of reviving the City of London.

The chef and restaurateur, best known for the celebrity hotspot Carbone in Greenwich Village, on the routines that help him manage a growing hospitality empire

Mario Carbone is famous for his spicy rigatoni vodka. But the chef has set his sights far beyond pasta.

With 25 restaurants around the country, he and his partners Rich Torrisi and Jeff Zalaznick have established a hospitality empire that includes a luxury apartment building, Villa Miami; a private members’ club, ZZ’s, which charges a $20,000 application fee; and a consumer-goods brand, Carbone Fine Food, which launched in 2021 and introduced jars of his famous spicy vodka sauce earlier this year. Carbone, 43, said he hoped hotels were in the future.

The trio’s best-known business remains Carbone, the Greenwich Village celebrity hotspot where it’s nearly impossible for a mere mortal to snag a reservation. Carbone said that to have a leg up booking a table, you had to know one of the secret email addresses.

“There are several that exist, and there’s basically a control room somewhere in the world run by one of our partners,” he said. “She’s been doing it for over a decade now, taking tens of thousands of reservations every single day.” Now there are several Carbone locations around the world, including in Miami, Dallas and Hong Kong.

Carbone was born and raised in Queens and now lives in New York and Miami with his girlfriend, the publicist Cait Bailey. Here, he discusses his love of cigars, why he thinks social media has hurt restaurant culture and the moment he felt he’d made it.

I get up at 5:30 a.m., and the first thing I do is let my dog Bronco out. I make myself a coffee and usually a small breakfast. By 7, I’m trying to get my morning exercise in—playing tennis, going for a run. I have a makeshift gym in my garage.

I drink pretty much exclusively iced coffee. I like it very strong, I usually do two shots of espresso and cold brew. My breakfast is usually a banana, a little bit of yogurt, egg whites and a wrap and avocado. Boring, healthy, just to get something in my stomach before I go.

I’m pretty peaceful by nature. If I don’t have quiet time to do my work and be in my thoughts, then I’m easily thrown off.

Travel is something I have no interest in dealing with on my own. I find it time-consuming and mind-numbing.

That is a very long list. I’m manic about the smallest things that I could probably not do myself. My assistant is critical in my world, and she allows me the opportunity to touch all of these really small [details] that I believe if I was to give up, I would be doing whatever the project is a disservice.

I hope not. I haven’t, and I’ve eaten it more than most.

Usually pretty simple stuff. Ten to 15 minutes max is my attention span during the week to cook for myself, a quick steak or a simple bowl of pasta. The only time of the week where I get even the slightest bit ambitious is probably on a Sunday, whether it’s just for me and my girlfriend or friends and family who are coming over.

We designed a small version of the pasta cookers, the tanks that I use in the restaurants, which are sunken wells of water. At any time, you can drop pasta in. You have all your burners free, and you have this very sleek countertop-height sunken tank for boiling water the way we do at the restaurants.

When, in the 10 years since Carbone’s opening, did you feel like you’d made it?

Maybe having President Obama for the first time. Even if we had lots of celebrities and big moments early on, I was able to really soak that one in.

Are there any food trends you can’t stand?

Certainly the food world has become very susceptible to cooking for social media. I do think it’s a wonderful thing that everyone now has the power to render a judgment or support their favorite location through their own channels. On the other side of that is when you get too distracted by it as an entrepreneur or chef and you start trying to make things for that Instagrammable moment. You’re generally going to fail, because your end goal is no longer to make the most delicious thing possible.

I am an avid cigar smoker. Usually I’m sharing it with someone, my father or a close friend. It gives you some time where you know you’re not going anywhere.

Is there a kitchen product people spring for that you think is unnecessary or overrated?

There are too many kitchen gadgets in the world. When I’m cooking at someone else’s house, their drawers are ridiculous. The amount of work I can get done with a singular good knife and a cutting board could probably replace an entire junk drawer of QVC-type items people have purchased in their lives.

I remember my dad talking to me when I was younger and trying to find my path. His great fatherly advice was, “I don’t care what you choose to do with your life. I do care that whatever you choose to do, you pour yourself into it, you give a damn about it and you try to be the best at whatever it is.”

Executive accused of using shell network to ship equipment to Russian manufacturer, in contravention of EU embargo

A German businessman has been charged by prosecutors with smuggling millions of euros of sensitive engineering equipment to Russia to manufacture sniper rifles.

Referred to in the prosecution as Ulli S, the executive is accused of having used a network of shell companies in Switzerland and Lithuania to hide the sales of equipment to an unnamed Russian arms company. In charges filed in Stuttgart on Monday, German prosecutors said six specialist German machines worth about €2mn had been shipped to Russia via the network in 2015-16. 

Germany has enforced a ban on the sales of arms and dual-use equipment used to make weapons to Russia since 2014, in compliance with an EU embargo following Moscow’s illegal annexation of Crimea from Ukraine that year. 

Faced with critical shortages of precision engineering equipment and high-tech electronics, Russia has since ramped up its efforts to illegally source components and machinery — often using its security services to help foreign entities violate sanctions. 

After President Vladimir Putin launched his full-scale invasion of Ukraine in February last year, the importance of such illicit networks has only grown. Concern in western capitals has mounted in recent months about Russia’s ability to evade export bans intended to hamper its war effort.

Germany, with its network of small and medium-sized specialist engineering companies, has been a particular target. 

In a separate case Waldemar W, a Russian-born German citizen, was arrested by police in August under suspicion of setting up a network to supply sensitive electronic equipment to Russia, including for use in Orlan-10 drones.

In their charges against Ulli S, German prosecutors alleged that he was fully aware of the purpose for which the machines he sold would be used. 

They claimed he established a corporate chain that would help provide plausible deniability about the machines’ ultimate recipient, and said he sent employees to Russia to install and calibrate the machines at the arms manufacturer’s facilities. His company also pledged it would help to train Russian factory workers to operate the machines to make guns, they added.

The indictment against him also claimed that he shipped four sniper rifles in 2015 from the Russian manufacturer — also a breach of sanctions rules — to western Germany, to ensure the machines would function at maximum efficiency for his Russian client. Ulli S forged the dates on the rifle order’s contracts so that it predated the EU’s embargo, the indictment also claimed. 

Ulli S has not yet appeared in court to respond to the charges. The German national was arrested in France in August and transferred back to his home country for questioning. It is standard practice in German criminal investigations for the full names of suspects not to be disclosed.

In March, the US said it was doubling down on efforts to police sanctions, amid fears that Moscow was securing access to the sensitive materials it needed by routing shipments through third-party countries such as the Gulf states and Turkey. 

Switzerland has also become an increasing point of focus. Prosecutors claimed Ulli S executed two of the three banned contracts he made with Russian entities via the Alpine country.

Private equity firm agrees deal that values Danish sandwich chain at about $600mn

US private equity firm General Atlantic has agreed to take a controlling stake in Joe & the Juice, increasing its investment seven years after initially putting money into the Danish sandwich chain.

General Atlantic is increasing its interest in the company from about 30 per cent to as much as 90 per cent in a deal valuing Joe & the Juice at about $600mn, according to a person familiar with the matter.

The transaction will see existing shareholders, including Swedish investment firm Valedo Partners, cash out. The investment will be used to reduce Joe & the Juice’s debt load and help the company expand into markets such as the US, the person added.

The deal highlights private equity’s continuing interest in high-street food chains despite a mixed record in the space. Private equity-backed chains such as Prezzo and Côte Restaurants have had to undergo restructurings to stay afloat. Burger chain Byron Burgers has also suffered financial difficulties.

Founded in Copenhagen in 2002, Joe & the Juice sells juices, coffee and sandwiches made of natural ingredients. The chain has expanded rapidly in recent years with the help of private equity money, more than quadrupling its revenue since 2016 as a growing number of consumers choose businesses that emphasise organic and sustainably sourced ingredients.

Since General Atlantic first invested in 2016, the company has doubled the number of stores it owns to more than 360 globally. Some of this growth has been driven by its expansion in the US where it now has about 70 stores, up from less than five when General Atlantic first invested.

The company wants to expand its presence in other international markets, including the UK, Europe and the Middle East, where it owns 23 franchised stores.

Joe & the Juice has also built out its digital business, which now accounts for 30 per cent of its sales.

General Atlantic, which manages more than $77bn, is best known for backing fast-growing technology and consumer companies, including TikTok’s parent company ByteDance.

The group has expanded its business recently after acquiring private credit firm Iron Park as well as a stake in a company that buys second-hand stakes in private equity funds.

As the official engineering partner of the Mercedes-AMG Petronas Formula One tran, the launch comes ahead of the new Las Vegas Grand Prix.

Sports cars and sports watches have perennially made for a perfect pairing thanks to their mutual reliance on engineering and performance.

With the inaugural running of the Las Vegas Grand Prix just one week away, luxury watch brand IWC Schaffhausen is introducing two performance chronographs dedicated to its motorsport partners Mercedes-AMG and the Mercedes-AMG Petronas Formula One team. IWC is the team’s official engineering partner.

The two companies have partnered on limited editions since 2004.

The Pilot’s Watch Performance Chronograph 41 AMG utilizes a grade 5 titanium alloy to craft its case, crown and pushers and is used in automotive engineering to manufacture components for high-performance engines, making it 45 percent lighter than steel and remarkably rigid.

IWC has pioneered this hard-to-machine metal in the watch industry since 1980 when they released their first wristwatch with a titanium case and bracelet.

Offered in two versions, one with a waterproof black rubber strap, and with a titanium bracelet with H-links and an integrated folding clasp.

Last year, IWC introduced the Pilot’s Watch Chronograph 41 Edition “Mercedes-AMG Petronas Formula OneTM Team,” and the official team watch, and now it is also launching a performance chronograph dedicated to its partner, the Pilot’s Watch Performance Chronograph 41 Mercedes-AMG Petronas Formula One team. This version’s case is crafted from Ceratanium, which has the structural integrity of titanium with the hardness and scratch-resistance of ceramic, and is finished with a black rubber strap with a Ceratanium pin buckle, as well as a version featuring a Ceratanium bracelet with an integrated folding clasp.

Both watch styles are powered by the IWC-manufactured 69385 calibre movement. A standout feature in both versions is the ceramic bezel with a tachymeter scale, which allows the wearer to measure the average speed in relation to the distance traveled, all by pushing the chronograph’s start button.

Pricing will range from $9,800 to $11,700 for the Chronograph 41 AMG, and $13,700 to $19,900 for the Chronograph 41 Mercedes-AMG Petronas Formula One Team, which are available for purchase now via IWC’s website.