Summit Notebook
Exclusive outtakes from industry leaders
AUDIO – The costs of war
Wars have numerous costs and most of those are unimaginable for most of us not in the middle of one.
But, aside from the tragic cost of death or injury, wars also cost a lot of money to finance and President-elect Barack Obama will be facing some of those costs (as well as a whole mess of other stuff) when he takes office in January.
As the United States grapples with a severely struggling economy, a number of federal bailouts and questions about our overall financial shape, Obama will also have to decide rather quickly how he will prosecute the wars in Iraq and Afghanistan and the staffing of the military.
On Monday, Loren Thompson of the Lexington Institute and Richard Aboulafia of the Teal Group spoke at the Reuters Aerospace and Defense Summit about the kinds of challenges Obama will face and just how much this is all going to cost.
AUDIO – Teddy Roosevelt had it right
The world is a more dangerous place because of the global economic meltdown, according to Northrop Grumman Chief Executive Ronald Sugar, whose company provides specialized aircraft, radar and other electronics to meet that threat.
Sugar was the kick-off speaker at the annual Reuters Aerospace and Defense Summit on Monday in Washington, D.C.
Kuwait banks on luxury with third airline launch
As airlines around the world cut capacity and ground planes, the tiny Gulf state of Kuwait is stepping boldly into the global aviation crisis with the launch of a third carrier.
Kuwait National Airways hasn’t even taken delivery of its first plane yet, but when it does, it will be fitted with Recaro luxury leather seats.
Kuwaiti executives will be offered the lowest seat density Airbus A320 in the world, enjoy in-seat entertainment, and be able to use their mobiles phones and Blackberrys on board – at least for data — the airline’s CEO George Cooper told a Reuters summit.
Cooper is betting that the world’s seventh-largest oil exporter will remain an island of prosperity in the midst of a global financial crisis.
“Creating this airline is something that will work in Kuwait,” he said. “I can’t think of many other places in the world where it would.”
With only a business plan, the airline raised nearly $200 million in a 2006 initial public offering. Cooper, a former pilot who worked for many years at British Airways, said it will focus on ferrying businessmen around the region, with the first flight expected sometime in January.
The carrier, which will operate under the brand name Wataniya, is benefiting from the plight of airlines around the world as fears of a global recession loom.
It can now snap up pilots from around the world and capitalise on a glut of fuel as planes are grounded in the United States and Europe, Cooper said.
And high fuel costs that have plagued the industry are finally coming down – but that may not be entirely good news for Wataniya.
“Kuwait is a petrodollar economy, so there is a minimal oil price we want to see,” Cooper said.
But as the fate of recently-rescued Kuwaiti lender Gulf Bank shows, the country of 3.2 million isn’t entirely immune from the global crisis.
But even as its economy slows next year and prices for its main export drop, flying around the Gulf in plush leather seats may be too much for some Kuwaitis to resist.
