>> you are watching the best of bloomberg daybreak middle east. the airport sells passport numbers for 70% in 2020, but the latest stats show signs of recovery. cap bar is to expand its lng operations amid plans to be the largest supplier to the market. they are exclusive with the nation's energy minister. saudi arabia throws that god let to divide. -- throws the gauntlet to divide. ♪

manus: first stop, 20/20 was a challenging year for dubai international airport. it saw the number of passengers traveling drop to 26 million. new figures showed new hopes of the future. we have more with the dubai airport ceo. >> it really depends on the rates and fascination globally. we have seen good progress in the uae that can only see israel with vaccines per capita, and wants the rest of the world, which sadly is under 2% of the total population, gets towards a meaningful figure, then i think that traffic will look better on the back of that news. >> are you discussing any

agreements with other airports or countries to mutually recognize vaccines, because that has been a great area or an area that needs clarity. what kind of progress is being made on that front? paul: one of the most successful arrangements we made last year was an agreement between the u.k. and uae for a safe corridor, and i think as soon as those do countries get past the milestones we will see shortly, those discussions will be fruitful because we have already proven how productive they have been in terms of the confidence of the traveler to look at the u.k. and the uae as safe countries to move between. >> when do long-haul flights make a real recovery here? there is a lot to factor in, i appreciate that, but in terms of

the structural shifts that are on their way, what is your initial analogies -- analysis. paul: we have made good progress so far, we are something like 65% back in now in terms of flights. it will be sometime before you see the prolific mobility that we saw pre-covid levels. there are too many factors and governments are rightly focused on protecting their domestic population and getting a level of herd immunity through the vaccination program, and once they have those milestones, there focus will turn to rebuilding their economies. international travel is a major part of that. one third of the gdp here in dubai, so we are past that recovery plan. we are making steps every day towards being ready for that rebound. the only thing we do not know is

exactly when that is going to come because there are so many different factors involved. >> dubai's success over the years has been built on a concept of the hub model. that has worked well so far. does that model continue to be the bedrock of dubai's aviation future over the next 10, 15 years? paul: absolutely. it is the most effective and efficient way to serve the international markets. absolutely no doubt that that that model will continue to be the dominant model. we are still, despite the traffic fall, the largest inter continental hub in the world, and there is no reason to suggest why we won't be able to hold background going forward. i do not think that model will change. we have to get more confident around the world in travel being possible in

countries that have made progress in protecting their own populations. >> what about the plans for the new airport, have they been recalibrated, has that got stretched out a little bit further, are you still moving ahead as planned from the last year? paul: the plans are intact, but what we have now got to do is to look at what we think the future demand levels will be. that is very, very difficult. one thing is we are throwing out the rulebook as to what passenger demand is pre-covid, and i think the thing is, that obviously, everyone is looking toward the future, but in a moment, we are ready to accommodate all of the passengers. it may cause us to reset our plans for the future, but until we know what that future looks like, it is really difficult to comment further. >> i have been on a couple of

flights in the last three months, and i like shopping, i do not necessarily spend a lot of money there, but i like to be involved and i like the vibe in the energy. there was a buzz, people maintaining social distancing, but a lot of interest in going into these shops. i wonder with those duty-free shops more broadly. paul: even though the traffic numbers have been down, the spend per head has gone up as people miss purchases when going through the airport. it is a part of the travel experience being able to shop at the airport, but i think the changing role of retail, particularly the prevalence of e-commerce which has had a big rebound during covid-19, that will have an impact on the travel and leisure business.

we have thrown down the. let to a few suppliers to suggest how we might be able to change that model and actually do a little bit more horizontal integration with forms of delivery and forms of payment, and forms of shopping. expect some changes in travel retail, but we do believe it will remain a part of the whole travel experience in the future. >> you have been on the front lines of dubai airports now, and i want to leverage your experience around some of the bigger cycles. we are seeing oil prices now at levels that we have not seen before covid, and a couple of hours ago, alexander novak inks that the oil markets are balanced. what kind of impact does the higher energy prices have coming through the airport. is there a net positive, net negative, what ranges kind of healthy? paul: at the moment, all

statistics are unreliable because we are predominately dominated by the ability to travel between countries. all of those variables have a huge -- a strong oil price means higher ticket prices, but it is very rare in this business for one indicator to move on it, and it is usually accompanied by a huge number of different things at the same time, whether it be civil commotion or medical emergency, currency movements, energy prices, different things happening across the world. i think dubai is very well placed both geographically and economically about recovery. what we are trying to do is maintain liquidity, so we are in

a very, very good position to be able to springboard into the future and take advantage to whatever new travel domains will look like in the future. i think we have been able to remove quickly and be able to recover quickly. >> up next, expanding lng operations and supply to the market for more than 20 years. our exclusive conversation. this is bloomberg. ♪

>> welcome back to the best of daybreak middle east. the largest producer of liquefied natural gas in the world and is planning to move its operations that would dominate the market for 20 years. energy minister say and spoke exclusively to bloomberg starting with the current energy crisis in america. >> for texas to get the

temperatures that they have and the snow and ice is something unheard of. it is a one-time event, and essentially, at least for a few decades, we have not seen something like that. i lived in texas for some time. i know that they are not used to the snow, and all of the facilities and gas infrastructures is not set up in that area. maybe in the north but not in the south. it is a temporary thing and hopefully they will get things back to normal soon, but it did destructive the oil markets, especially in that region. >> you think it will go away? >> i am sure they are very resilient, the oil and gas industry, and i am sure they will get over it soon. >> you are about to undertake ahead of q p, and the energy of qatar, and massive expansion at

the countries lng capacity. explain to me, you had this on the books for a long time. but it was delayed slightly as with the coronavirus. why now, how does this work out as an investment and market thesis? >> as far as the expansion projects we have, we have two projects. we just announced sanctioning. the northfield east will take us from 77 million tons to 110 million tons, and the northfield south will take us to 126 million tons. we have announced our strategies very clear and these are very robust projects. we just mentioned last week that the total project cost for northfield east is $28.75 billion, to produce 32 million

tons and lng by 2025. this is one of the most competitive if not the competitive project -- the most for project today. we are proud of that. >> one more on the expansion. you are inviting international oil companies to bid for up to 30% of this project. what are you looking to see as you evaluate, what is exciting to you? >> what we did is very unique and qatar, we had never gone 100% q p in the past, and the now we have sanctioned this project as 100% q p, but we have international companies join us in developing these projects, but we invited them, we had

invited them for some time to come to this project, but what happened, we wanted to have certainty for our partners to come in and have certainty in the investment that they are coming into and they can come in and actually compete. >> would you offer them better terms as buyers of your lng if they come in? >> they would have to offer us. as a buyer, they would have to offer us a better deal to get a part of our development. our project is very robust. our project is one of the most robust projects at any oil prices that you see, even testing it at $20, it would be a

viable project. >> let's talk about some of your contracts. you have new supply, and you are a fan of a long term contracts, typically linked to oil. when you look philosophically at all the lng, what percentage do you want long term, what percentage do you want as short-term, and is there any thing else and a third way as well? >> long-term is the best approach, it is the best approach for both sides. it is the best approach for the buyer and for the seller. it has certainty of the demand that is required and you understand what is required by each country, and they have some winter requirements, and some are requirements, they have storage requirements, and so on. once you have a contract with a

supplier that has a proven track record with more than 20 years, then you have certainty of supply. this is very essential power projects with a national security element for supply for the country. i think a lot of the countries we would look at stability as something that is important. lng is treated like a commodity, and you can just have spots market, and it is not true. and the plans coming off line and technical interruptions with any plan, where you saw gas

prices at more than 30. you had gas prices with more than two dollars, and that this year, we had gas prices of more than $30, and that instability in the market for the buyer or the set up. to answer your question, i think 10% or thereabouts of production to be would be something reasonable. we would be capable of doing either. >> there are analysts who believe that the demand for natural gas is going to take peak somewhere around 2035. i am guessing that is not your view. >> peak oil was discussed may be 20 or 30 years ago, where we thought the peak oil was coming much sooner, and it is already

past that, some analyst 20 years ago. we should have already pete which does not happen. i think -- for what we are requiring in the future, there is a definite requirement, and there is a transition that is happening, and it is a big one for the future, there is no doubt. we owe it to the world and our children to be more responsible than what we do and how we do it in the future. that is definitely something that i believe in strongly. is it required for you to go to a transition for something that is really unknown to be fully renewable is almost impossible because of the intermittentce of renewal. it is not going to be there and

every country. it is going to be available in 360 five days, but nowhere else. renewable is something that will definitely happen. we are doing a live renewables ourselves, but you need gas to complement that. gas, really is sort of in a catholic marriage with renewable and -- in my view. >> a catholic marriage. [laughter] >> they would need to stay together for a very long time to have a transition. if you look at what people do not talk about today, 50% of the world's power is actually fired by coal. if you take the no field expansion and the project we sanctioned last week, just the nfe, and you just take that project and you say, i will

replace that volume of gas to fire up a generation instead of court, you actually reduce the co2 emission. that is equivalent to 25 million because in missions in a year. >> find out the latest regional rivalry right here on bloomberg. ♪ when you switch to xfinity mobile, you're choosing to get connected to the most reliable network nationwide, now with 5g included. discover how to save up to $300 a year with shared data starting at $15 a month, or get the lowest price for one line of unlimited. come into your local xfinity store to make the most of your mobile experience. you can shop the latest phones, bring your own device, or trade in for extra savings. stop in or book an appointment to shop safely with peace of mind at your local xfinity store.

♪ >> welcome back to the best of daybreak middle east. saudi arabia increasing pressure on international firms. it poses a direct challenge to neighbors like cities of dubai. starting on january 1, 2020 four, the saudi government and state backed institutions will stop signing

contracts with any other country in the region. we have more with bloomberg's matthew martin who joins us. : -- matthew: saudi arabia has announced this latest to beef up the economy to attract international firms into riyadh where there is a vast complex, which is sitting largely empty now, and they want to attract some firms in. there is something of a recognition within the government whilst smaller companies, mostly international firms have big bases in dubai from which they serve the region, obviously, a huge chunk of the revenue they are getting comes from contracts in saudi arabia.

the government is trying to -- a couple of months ago, we had this program of incentives that was talked about, which gave companies tax breaks and some leeway in the requirements to hire locals. that was the carrot to attract people into saudi arabia and now, this is perhaps the sti ck, that if companies do not take the offer of relocating their headquarters into riyadh, they will no longer be eligible for government contracts. >> what is your sense on the ground in riyadh to on how many companies are already trying to get ahead of that decision, given some of the ambitious goals by the public investment funds, the sovereign wealth fund, and the fact that if there is any growth to be captured, is going to be in the kingdom?

-- matthew: saudi arabia is the biggest economy in the region. it is the most significant across many industries and we have about 24 companies announce the saudi investment conference last month that they were going to make saudi arabia their regional headquarters. there is some companies which is starting to shift across. the challenge will be as businesses look to leave dubai,

has a huge choice in terms of schooling and restaurants to go to. and it works very well in terms of welcoming ex-pats and getting them set up to live in the country. saudi arabia is still playing catch up and a lot of those areas. as much as it will want -- it wants to attract these businesses, it will take a bit more than tax incentives to really make this a place that people want to base themselves in compared to the uae and dubai. yousef: you just moved to riyadh, you are the best example of someone who is not drawn in by the world infrastructure of dubai. matthew: [applause] -- [laughter] this is true. but speaking from personal experience, there are still some points that could be addressed to smooth out the process for firms as they are looking to base themselves here. clearly, there will be a little way to go. manus: up next, we will hear from the ceo by the earnings. this is bloomberg. ♪

manus: welcome back to the best of daybreak middle east. they posted a lot -- a loss. that wasn't as bad as the $207 million the markets anticipated. his of a melody spoke to -- yousef gamal el-din spoke exclusively to the ceo. >> the end of 2020, without we put it behind us and 2021, we started. but obviously, now we are living in the first part of 2021.

to be bluntly honest, it's a roller coaster. there are some good spots and some not so very good things. so, for our industry, we see that some markets are opening. the others that are opened are closing down. the change is really happening on a daily or weekly basis. this has to be dynamic enough or flexible to make sure you adapt very quickly. of course, that's caused quite a lot of inconvenience for the customers because nobody can book long terms. but the good sign that we are seeing almost everywhere and in a situation that makes me feel positive -- we see people eager to get on airplanes.

some airports are putting infrastructure. and i think the big thing that is happening is the vaccine. yousef: in terms of where you see the opportunity that need to be added about 14 new routes in 2020, do you keep it then at that number? do you recalibrate? is israel an option? adel: i think we obviously added , in 2020, those four because those were in the plan. and i'm sure there will be, once things opens up, once people are allowed to travel everywhere and restrictions are much less, then i'm sure we will look at more roads. and i think every airport, we will be happy. our job is to connect people from every airport. wherever people want to go, we will go.

yousef: what are the growth plans for abu dhabi? adel: i think abu dhabi, we have obviously set up ways to make sure the market, we will fill up those gaps. abu dhabi has got a 14 days quarantine, but we see it promising. despite the quarantine, we see the businesses on the rats we operate, reasonably acceptable for the current circumstances. and we also have it feeding into abu dhabi. so, there has been good. i'm sure once it is closer to normality, those will grow. i honestly do not know fully what the plans are and what they

intend to do, but i'm sure they will come into the market. as far as i'm concerned, our business with abu dhabi will be good as we progress. if we go to airlines, and i think abu dhabi has invested quite a lot of money in the last few years into the infrastructure, tourism business, so i believe i'm confident there is room for expansion in those areas. yousef: let's switch to your order book. you have an order of airbus jets. what's the status of that in light of demand and supply? is there a need to restructure? adel: so, 2021, we've only got one more to be delivered probably next month sometime. our ordinary books, plan for delivery for 2024.

which is not by design. but at the time, airbus was only able to deliver airplanes to us at 2024. so that's when we started taking delivery. it was expected by that time, hopefully the markets will have fully recovered. so, we did not need, as a result of the covid-19, to amend, to change our order books for the time being. and we'll see how the market progresses. from the aircraft delivery point of view, we're reasonably -- yousef: what about the listing in abu dhabi? he described the close relationship, the increasing importance -- you described the close relationship, the increasing importance of the skies. does that justify a listing on the abs? adel: something we listed in

dubai in afm, in uae, and the traders trade to both market. so, at the moment, that's something the board has not looked into or considered. what happens in the future is something we leave for the future. yousef: there's a lot of excitement around the reflation theme and we're trading in excess of $60 a barrel. at what point does it become problematic for you, as an airline trying to get out of a pandemic? adel: look, it has proven, and i've always said this, a low oil price is not necessarily good for our region. it's bad economy. so, i'm quite happy and pleased to see the oil is running at $65. that will revive the economy and

more people will be prospered to travel. from an airline point of view, i think we have enjoyed the hedging system that we've been running for the last few years and we have hedged at about $50, $55 for 2021-2022, and we're happy to see oil the price is where we are. manus:, tale of two cities. -- up next, a tale of two cities. that's next. this is bloomberg. ♪

manus:manus: welcome back to the best of daybreak middle east. net income for the full year that not only beat the analyst estimates, but outperformed its property appears. the abu dhabi developer posted

profits almost unchanged from a year ago, benefits from government contracts. we spoke to the ceo about the earnings. >> we reported a very strong fourth-quarter. our development business is clearly been the outperform. -- outperform or. -- has clearly been the outperformer. people are looking for a good deal, with the quality of what we offer at the locations that we have. we definitely saw a pickup. we ended the overall year at $30.6 billion of sales. considering we didn't actually have many new product launches except for a launch in november, where we sold out middle income product within a week, generating $1 billion of that total. overall, as a group, we were very pleased.

2020 was a year filled with global uncertainty. what the uae has done to stabilize the economy has allowed businesses and market leaders to flourish at a time when others were left wondering how to adapt their business model. a sustainable, diversified business model pays out. yousef: are more foreigners buying your product? >>, righties definitely rep -- emirates definitely represents 65% of our overall sales platform. 2020 was a tough year for us to target the international buyers. we have four or five key markets that we're looking at, the gcc, u.k., china, but obviously some of those efforts were put on hold in 2020. we are going to start 2021 very strong and move into those markets to really beef up -- abu

dhabi has aa economy, current yield story around 7%, and we've seen abu dhabi's ability, economically, to really withstand all of these headwinds, putting us in a strong position of growth for 2021 and beyond. yousef: your dubai property. developers are still hurting -- peer developers are still hurting. what are your expectations for a recovery in some of the important parts of the emirates around property price? >> i think the story in abu dhabi has been, you know, a well-balanced demand and supply. there were pockets of oversupply in some areas, and you know, we celebrant prices and sales prices drop. but we've seen a big shift to horizontal development.

there's been price increases reported in villas and townhouses as we've seen the latest research reports that are out there. i think one's ability to be able to swap from different locations and different products and really focus on the customer can really drive results, given our sort of market leader position in abu dhabi and our diversified business model between the development and diversified asset management platform has allowed us to really see those pockets of demand early on, and really get them strong. -- hit them strong. yousef: in november, the signal that came from the properties was you were looking to buy assets. we understand you bought azteca asset management, as well. what else are you looking? where you looking for specifically? >> so, as we expand in the next period today, fo rus -- for us,

we're setting ourselves up for growth. we're seeing opportunities in the market. we will be growing across the different areas, so if you look at, for example, our development business, we've obviously earned the trust of the government. that performance will reflect in 2021. it will have a material impact on 2020 results. on the assets management, we've been reciting cap -- recycling capital. district cooling assets, hotel assets, we'll be redeploying that in 2021 to other areas. we're expanding capital management. we bought two companies last year and this year, expanding our education platform. and other sleep, international -- obviously, international growth, where egypt is our key market of choice. yousef: sounds to me the answer is yes, you're buying more and

you are open to a few more options. >> yes, but in a very, very controlled, responsible, and sustainable way. it's not going to be massive surprises where we divert away from our core business model. we will deploy that capital at a very responsible and in a creative way. and more importantly, we will continue to award shareholders. last year, we went out in the middle of uncertainty in march and rewarded our shareholders. this year, our board recommended another year, ever eight consecutive year for progressive transparent dividend policy, clearly rewarding our shareholders. and that cycle is going to continue in 2021. yousef: talal, recently there was a green -- an agreement worth of deal from the government.

are there any additional deals or agreements with uae government that could be forthcoming, maybe even with other governments in the region? >> i think what we've done in the government is cemented our position as a trusted real estate partner. while that's a low fee-based business, our development unit, normally the more cyclical one compared to our assets management one, right now this gives us a very strong recurring income stream. the overall compensation of the group is -- composition of the group is one of strength. we see opportunities to take on fee-based projects. we are taking on, maybe less highlighted in the media, but more responsibilities today. in addition to the risk -- assets we own, we own $2 billion worth of assets in investments. in our schools, we manage both

government and private schools. so, managing third-party assets and deploying our very strong capability towards that is something that we're going to focus on in each one of those areas. yousef: what about your funding needs for some of the plans for 2021 and beyond? we understand an and national bond sale is really -- ready. how much are you looking to issue? >> so, we remain at a very, very strong position from our balance

manus: welcome back to the best of daybreak middle east. the gulf arab states lost up to 4% of their population last year and an exodus of expatriates. that could complicate the diversification of the region's economy. there was a new report this week. we got the take on the report. he's ahead -- the head. >> i think the report, the findings of the report have been widely expected and appreciated by the market, especially given the severity of the contractions that we saw last year in the economy. now, we don't see it as an immediate stress even the majority of people leaving have been lower income blue-collar workers. i think what's important to note is the policy responsible was

seen by local governments. uae is a case in point where we've seen regulatory forms aimed at attracting a wider net of people for a longer periods of time. and as you mentioned in the introduction, we saw saudi come out with a major announcement that will help -- halt government contracts to corporate's that don't have the presence in saudi arabia. this is quite able to move that aims at boosting employment, as well as -- manus: that bold move, do you think is a threat to dubai? >> it's an implicit threat, obviously, given dubai's long-standing position with the regional hub. however,, it's yet to be seen how that translates. sally is by far the largest market -- saudi is by far the

largest market in the region. we have to adhere to this new ruling. yousef: well, let's talk about corporate earnings and flesh that out. we have the latest in a series of announcements. i break down which companies have so far reported, and dubai a little ahead of the others in terms of where they are in the earnings season. 35 out of 36 companies have reported. on the sales side, the surprise was to the upside of 13.5% on average. on the earnings site, there was a downside surprise of -40.8%. review encouraged by any part of the numbers that you read? >> look, i mean 2020 has been quite the challenging year, with the pandemic and the contraction that we saw. so, we weren't surprised by the results. msa, the result -- i must say,

the results have been fairly mixed. case in point, uae developers, we've seen a widespread of earnings come out. i think numbers were quite positive and again, the guidance has been quite positive. again, mixed results. sales numbers have been better than expected. interestingly enough, there has been a cost quotient affecting the margins. so, they haven't released their full results so we can't tell, for the time being, but it's definitely something worth clarification. manus: can we just pivot to sally, and -- saudi? you're bullish overall on the earnings. but if we look at saudi, the highest number since 2006. you're bullish in terms of the lending market.

is that one of your key calls in the market, and with that backdrop? >> it is. sorry. so, you not, they came out -- you know, they came out with their earnings. the earrings have been quite surprising and positive. i think a bright spot, as you mentioned, has been the mortgage lending. this is the sector that has been going quite aggressively. i think for the first time, they provided some guidance on the growth prospect and increasingly more than 30% growth the next few years. so, definitely, the banking sector is going to be driven by the penetration of further mortgage lending. yousef: where is your thinking at around the rally we're seeing in oil prices, level we haven't seen since before the pandemic hit? we understand the saudi crown prince has been on the phone with the russian president discussing what they usually discuss, the oil markets. is that sustainable?

is that a realistic reflection of an economic recovery? >> so, we are -- i would say we are cautiously optimistic about the prospects of oil. as you mentioned, the support and agreement between the opec-plus members is critical. because again, it's opec-plus that's managing what a case supporting supply and demand dynamics and managing inventory build. so, definitely we would like to see that support moving forward in order to support further prices. and i think one important take away is that the saudi strategy so far, and supporting the market, has been quite successful. we take a look at the wheel curve, the oil market -- oil curve, the oil market has gone into activation, which creates

challenges for long-term capital deployment, which again, coming at a time when these companies are focused on bringing down leverage. so, over the medium term,w e're optimistic on prospects of oil. manus: a new lab study showed pfizer and biontech supported two thirds lower level of neutralizing antibodies against the south african. of the virus -- south african variant of the virus. we got more with emily chang. emily: we've seen the company conduct one of the more frightening variants spinning around the world. the vaccine, which we know is over 90% efficacious against the original strain, produces the lower level neutralizing antibodies. this is a study conducted in the lab that is far from certainty over how that's going to play

out in the real world. but that broader take away is that we are in a race to catch up with how this virus is mutating and transforming. manus: meanwhile, there are concerns about astrazeneca's vaccine, aren't there? rachel: right, and this is a separate issue, really, which reflects the urgency and how fast the vaccine rates have been progressing. we know in the eu, after the spat with astrazeneca to get those deliveries into the e.u., they have 3 million shots of astrazeneca right now that in the initial stage, we're seeing less than 1/10 of people taking the shots. and i thing it also goes back to what the french prime minister said in january, that the astrazeneca shot is almost ineffective against older people and people above the age of 65, which of course are the most vulnerable group. so, there's a lack of confidence

in the astrazeneca shot, which is not good news in the eu because they have 3 million -- 300 million of those shots and they have to get it out. manus: remember, you can catch daybreak middle east right here on bloomberg television, 8:00 dubai time. join as than. test join us then. -- join us then. this is bloomberg. ♪

>> the following is a presentation for work from home secrets, brought to you by john crestani. announcer: are you disappointed with how much money you make?

worried your debt is getting out of contr