Lufthansa is striking back at competition from Arabian Gulf rivals with an $111 fare to Dubai.

It comes as tensions mount between regional carriers and European and North American rivals fearful of losing market share.

Eurowings will start to serve Dubai on an introductory fare of €99.99 said Karl Ulrich Garnadt, the chief executive of Lufthansa German Airlines.

“Our new Eurowings strategy is to strengthen our position in point-to-point traffic,” he said. “The new Eurowings will tackle on long-haul routes with a new brand launch, affordable ticket prices and an attractive route network.”

The planes, operated by the company’s SunExpress joint venture with Turkish Airlines, will also fly to Bangkok and Phuket in Thailand and Varadero in Cuba.

The new service will escalate competition with Dubai-based Emirates which this week claimed it supported more than 85,000 jobs in Europe and contributed billions of euros to its economy.

Turkish Airlines is also moving towards increased competition with Emirates and other Gulf carriers as it aims to double its fleet to 450 aircraft by 2023 as Istanbul also pitches to become a global travel hub to rival Dubai.

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Russia is in talks with Abu Dhabi investors to build a major airport in Cuba to serve as a hub for Latin America.

In an exclusive interview with The National, Russian trade and industry minister Denis Manturov said discussions had taken place with Abu Dhabi’s strategic investment company Mubadala to invest in the vast project.

Mr Manturov said Russia planned to invest at least US$200 million (Dh734.6m) in the project, which could also include redeveloping a port and building a railway line.

“We are deeply involved in these negotiations,” the minister said. “Cuba is developing a transport hub from the seaport and a railway to the airport.

“They have only one international airport and they are planning to use one of the ex-military bases to build a big airport hub for Latin America.”

A Mubadala spokesman said: “The company is regularly reviewing a number of different investment opportunities with its Russian partners.”

Battered by international sanctions over the conflict in Ukraine, Russia is strengthening ties with trading partners in the Middle East, Asia and Latin America.

After five decades of hostilities, relations between the US and Cuba are thawing, attracting the interest of some international investors.

The port of Mariel is at the centre of a special development zone established to attract foreign investment into Cuba.

Brazilian construction group Odebrecht last year finished an $800m project at the port, west of Havana. A Cuban embassy official said he did not have information on the project.

Russia’s involvement in the project is part of a move by president Vladimir Putin to effectively write off about $32 billion of debt from the Soviet era, when Cuba relied heavily on USSR support.

Cuba will still have to pay back more than $3bn in 10 years under a deal revealed last summer.

Mr Manturov has held several meetings this week with government officials and sovereign wealth funds in Abu Dhabi, where he is leading a huge delegation of Russian arms makers at the Idex military exhibition.

He said that Russia hoped to boost military exports to the UAE and establish ties with its fledgling space agency.

His visit coincided with a threat by the US secretary of state John Kerry of increasing sanctions for recent fighting in Ukraine – a threat the minister shrugged off.

“It is useless to use fear against us because we know what fear is,” Mr Manturov said. “Nobody has ever managed to receive a positive result from the use of force and pressure on our country.”

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The sprawling military machines of Russia and Ukraine once counted on each other for the parts needed to assemble their armaments. Now everything has changed and the defence industries of the belligerents have become collateral damage in the conflict.

Both are adjusting by making more home-grown versions of the parts they once imported or sourcing from elsewhere among the former Soviet republics.

At the Idex military expo in Abu Dhabi, where the world’s biggest arms makers gather once every two years to display their wares, the pavilions of Russia and Ukraine are a safe distance apart.

A huge armoured car guards the Ukraine stand, while a tank is parked in front of the Russian pavilion as a former special forces soldier bedecked in combat fatigues displays the latest laser-sighted Kalashnikovs.

The big military exporting corporations of both countries have some of their most powerful weapons on display, along with some of the most powerful military figures in charge of making them.

Sergei Chemezov, a high-profile ally of the president Vladimir Putin and chief executive of the state-owned military corporation Rostec, heads up the Russian presence.

Roman Romanov, a former political campaigner for the Ukrainian president Petro Poroshenko, leads Ukraine’s military machine as the chief executive of Ukroboronprom.

Both men are overseeing the transformation of their arms industries as Russia seeks to offset the impact of sanctions, while Ukrainian manufacturers switch focus to provide the arms needed to defend the country’s borders, also attracting foreign investment into their industry.

“We had to change overnight,” recalls Nadiia Stechyshyna, an aide to Mr Romanov, describing how some of the country’s factories in the east of Ukraine were destroyed following the outbreak of violence last year. At the same time, it lost control of its marine assets in the Crimean Pensinsula.

The loss of those assets was a major blow for the company – if one that Mr Chemezov downplayed at a press conference this week.

“Those companies were half-dead,” he said in response to questions from The National. “They were mainly vessel-building and maintenance companies.”

Nonetheless, their loss is an added challenge for Ukraine’s depleted military machine as it balances the commercial demands of the company with the defence demands of the country.

“Our partners have been very understanding,” says Ukroboronprom’s Ms Stechyshyna. “Some of the contracts might have been delayed, but we completed our obligations. They understand there is a threat to our national security. Surely we have to intervene and work all the days and nights to get the soldiers what they need to fight and preserve their rights.”

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Denis Manturov remembers being Russian in America during the Cold War.

As the child of a diplomat, he had the rare privilege of experiencing life beyond the Iron Curtain. Four decades later he is Russia’s minister of trade and industry and the man entrusted by Vladimir Putin to protect the country’s US$40 billion in annual exports in the face of sanctions imposed over the conflict in Ukraine.

He still recalls what he describes as the “cautious looks” reserved for his countrymen when New York was his temporary home.

“These days are coming back,” he says. “It is funny. I never expected these days would remind us of back then.” He is not the first observer to allude to the dawn of a new Cold War a quarter of a century after the fall of the Berlin Wall.

And as the sabre-rattling of old returns between Washington and Moscow, he remains defiant.

Asked for his response to the threat of new and “serious” sanctions against Russia made over the weekend by the US secretary of state John Kerry, he switches from English to his mother tongue.

“This question I will answer in Russian,” he says. His translator is barely able to keep up.

“It is useless to use fear against us because we know what is fear. In our history nobody has ever managed to receive a positive result from the use of force and pressure on our country. Of course it is uncomfortable, and we don’t like to find ourselves in this situation, but there is no such situation without a solution.”

He is not going to let Mr Kerry rain on his parade. After he has vented on why sanctions will not work against Russia, the smile returns.

He is celebrating his 46th birthday in Abu Dhabi and has spent much of the day in a series of whistle-stop meetings with government officials and sovereign wealth funds.

He talks enthusiastically about plans to develop joint projects with investors from the UAE that include a vast airport project in Cuba.

As Russia becomes increasingly isolated by the West over the bloody conflict in Ukraine, the country is busy looking to forge new trade relationships while its industrial titans are forced to become ever more self-sufficient.

He says that many international companies have opted to move production facilities to circumvent sanctions that may have otherwise hampered or halted their trade with the country.

“Those companies that localised their products in Russia have become very competitive in supplying third countries,” he says. “With the devaluation of the rouble we have the benefit of our products being very competitive – not only locally but outside Russia.”

Mr Manturov arrived in Abu Dhabi this week with the top brass of Russia’s military. The country has much at stake, with some $15bn worth of defence exports last year.

When sanctions hit, arms makers such as Kalashnikov, which had prospered for decades by making the world’s most famous assault rifle, found their export markets shot to bits overnight.

The company was compelled to bring in new investors, target new markets and make new products from drones to boats.

The changes afoot at Kalashnikov, the best known of Russian military exports, are a prism onto how sanctions are reshaping an industry in which Soviet-era structural weaknesses have been exposed by the conflict with Ukraine.

Mr Manturov acknowledges the weaknesses of the old defence industry model.

“The problem of the Soviet military industrial complex was with total independence without the civilian products in the sights of the corporation. It was always about the military. Our main aim now is to have a balance between civilian and military. So you can have a balance and share the technology.”

That model also better supports the flow of technological innovation between military and civilian-focused products, he believes.

“In the past even in the US military companies always fed the civilian space with technology and ideas. But today we are moving faster in the civilian space and transferring that technology to the military. That gives us a sense of stability and strategy in our military complex.”

Russia will need such industrial stability if it is to overcome the political and economic pressures it now faces.

While the minister may not welcome the return of the Cold War, his memories of the old Soviet Union are good ones, he says. And as Russia increasingly looks south and east to develop new trade ties and strengthen existing ones, there is little doubt about where his allegiances lie.

“Russia is not western Europe. We have never been part of the West. We have always been East. We are Eurasians – somewhere in the middle. With our character we are more close to Asia and the East. We are responsible – if we give a promise we will keep it. We try to deal with partners who are also responsible – who are not changing their habits. Today we are friends, tomorrow we are not friends? If we are friends, we are friends forever. It is our character.”

scronin@thenational.ae

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Denis Manturov remembers being Russian in America during the Cold War.

As the child of a diplomat, he had the rare privilege of experiencing life beyond the Iron Curtain. Four decades later he is Russia’s minister of trade and industry and the man entrusted by Vladimir Putin to protect the country’s US$40 billion in annual exports in the face of sanctions imposed over the conflict in Ukraine.

He still recalls what he describes as the “cautious looks” reserved for his countrymen when New York was his temporary home.

“These days are coming back,” he says. “It is funny. I never expected these days would remind us of back then.” He is not the first observer to allude to the dawn of a new Cold War a quarter of a century after the fall of the Berlin Wall.

And as the sabre-rattling of old returns between Washington and Moscow, he remains defiant.

Asked for his response to the threat of new and “serious” sanctions against Russia made over the weekend by the US secretary of state John Kerry, he switches from English to his mother tongue.

“This question I will answer in Russian,” he says. His translator is barely able to keep up.

“It is useless to use fear against us because we know what is fear. In our history nobody has ever managed to receive a positive result from the use of force and pressure on our country. Of course it is uncomfortable, and we don’t like to find ourselves in this situation, but there is no such situation without a solution.”

He is not going to let Mr Kerry rain on his parade. After he has vented on why sanctions will not work against Russia, the smile returns.

He is celebrating his 46th birthday in Abu Dhabi and has spent much of the day in a series of whistle-stop meetings with government officials and sovereign wealth funds.

He talks enthusiastically about plans to develop joint projects with investors from the UAE that include a vast airport project in Cuba.

As Russia becomes increasingly isolated by the West over the bloody conflict in Ukraine, the country is busy looking to forge new trade relationships while its industrial titans are forced to become ever more self-sufficient.

He says that many international companies have opted to move production facilities to circumvent sanctions that may have otherwise hampered or halted their trade with the country.

“Those companies that localised their products in Russia have become very competitive in supplying third countries,” he says. “With the devaluation of the rouble we have the benefit of our products being very competitive – not only locally but outside Russia.”

Mr Manturov arrived in Abu Dhabi this week with the top brass of Russia’s military. The country has much at stake, with some $15bn worth of defence exports last year.

When sanctions hit, arms makers such as Kalashnikov, which had prospered for decades by making the world’s most famous assault rifle, found their export markets shot to bits overnight.

The company was compelled to bring in new investors, target new markets and make new products from drones to boats.

The changes afoot at Kalashnikov, the best known of Russian military exports, are a prism onto how sanctions are reshaping an industry in which Soviet-era structural weaknesses have been exposed by the conflict with Ukraine.

Mr Manturov acknowledges the weaknesses of the old defence industry model.

“The problem of the Soviet military industrial complex was with total independence without the civilian products in the sights of the corporation. It was always about the military. Our main aim now is to have a balance between civilian and military. So you can have a balance and share the technology.”

That model also better supports the flow of technological innovation between military and civilian-focused products, he believes.

“In the past even in the US military companies always fed the civilian space with technology and ideas. But today we are moving faster in the civilian space and transferring that technology to the military. That gives us a sense of stability and strategy in our military complex.”

Russia will need such industrial stability if it is to overcome the political and economic pressures it now faces.

While the minister may not welcome the return of the Cold War, his memories of the old Soviet Union are good ones, he says. And as Russia increasingly looks south and east to develop new trade ties and strengthen existing ones, there is little doubt about where his allegiances lie.

“Russia is not western Europe. We have never been part of the West. We have always been East. We are Eurasians – somewhere in the middle. With our character we are more close to Asia and the East. We are responsible – if we give a promise we will keep it. We try to deal with partners who are also responsible – who are not changing their habits. Today we are friends, tomorrow we are not friends? If we are friends, we are friends forever. It is our character.”

scronin@thenational.ae

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