Middle East Business Aviation 2019
Leaders from all areas of Middle East business aviation gathered at the Ritz Carlton in Dubai in April for the Corporate Jet Investor Dubai 2019 conference. While many acknowledged a stagnant market there were some bright spots, and it is worse elsewhere, as Asia-based Jeff Lowe pointed out.
Corporate Jet Investor Dubai 2019 took place in early April, with a full house gathering at the Ritz Carlton to hear a number of expert speakers and discussion panels. As last year, the event opened with the operators’ panel. At CJI Dubai 2018 roughly the same group had forecast a tough 12 months ahead. The majority confirmed that prediction. The ongoing political uncertainty in Saudi Arabia and the continuing blockade in Qatar have hit two key markets.
Frank as ever, Mike Berry, President Aviation Services & Vice President Middle East, ExecuJet, described 2018 as terrible, but added that the last few months had been encouraging. Richard Lineveldt, General Manager, Gama Aviation, said it had not been brilliant; Raman Oberoi, Chief Operating Officer, Falcon Aviation Services said that a steady customer base had allowed them to meet their targets, but with no increase in business; and Paul van der Blom, Director Commercial, DC Aviation Al-Futtaim said business was ‘OK’.
Only Rob DiCastri, President and CEO of the all-BBJ Royal Jet Group, was cheerful. “We had a record year,” beamed the Canadian. “And seeing as things haven’t been great in the market, we think it can only get better, should the Saudi market come back. We are a unique niche operator and it has worked well for us.”
Diversity in operations seems to have been the main saving grace for local operators, with maintenance being key. Oberoi said: “Not all our eggs are in the same basket. Falcon is now hugely into the MRO business and has invested in the new hangar for this year, as well as our FBO and helicopter charter.”
DCAF also benefited from a mix of business. Van der Blom explained: “We have done a lot more maintenance business with Lufthansa Technik and are getting well known for that work, as well as for hangar parking.”
While some panel members had added new owners to their fleets, operating preowned aircraft, overall they had not seen growth, with most agreeing that they had seen more owners leaving the region than arriving into it. The popularity of preowned aircraft, especially as an introduction for new owners pointed to a changing market. DiCastri said: “The age of the aircraft isn’t a big deal these days. In NAS 15 years ago, the age was everything. But now, if the aircraft has a good interior and the price is right, then that is OK.”
The panel was quite positive about improvements in the Saudi market. Van der Blom said: “I think there are opportunities. There was the first Saudi Airshow, and it was very positive. You could feel there was a change in the market, and that it may be starting operating and flying again.”
DiCastri agreed: “We have seen activity on the Saudi side, but mostly from government. They are putting on lots of events and things are happening. They now have the ministry of entertainment and sport and are looking to bring people into the country.”
Oberoi added: “There are 59 airports in Saudi, and there is a big market internally for charter and FBOs, so it is a supplement to the UAE business.
Looking forward to the next 12 months, the outlook was generally positive. Berry said: “We have seen positive signs already. Last year was the fallout from Saudi Arabia and the effect that had on our FBOs. We have seen a five per cent increase and believe this year will be better than last year.”
Oberoi was confident of Falcon’s performance. “We think our FBO business will grow and our charter business will be stable. I think that Expo2020 may bring more movements to Dubai.”
The positive outlook was reflected in the gathered audience, with 57% of those in attendance feeling fairly optimistic about their companies in the next 12 months. This compared to 56% at Corporate Jet Investor Miami 2018 and 67% at Corporate Jet Investor London.
Saudi contribution
The potential of Saudi Arabia was also discussed by NasJet’s Captain Mohammed Al Gabbas, SVP Commercial, and Yosef F Hafiz, VP Sales & Marketing.
Not surprisingly, Hafiz expressed great confidence in Saudi Arabia, particularly with mega projects like the Red Sea development and Neom leading to many government officials travelling in private jets, as well as offering future business potential. “I think Saudi Arabia is the place to be. I always tell people to continue doing business here. It’s going to be the next big boom,” he said.
The fact that GACA has taken a strong stance against the grey market bodes well for the charter market, as well as the positive effects of new regulations, in effect from January. Hafiz also felt that helicopter charter, currently not available in KSA, will be introduced, as there is a great demand.
He added: “The total number of aircraft in the Saudi fleet has dropped and in 2019 will probably continue to drop. However, in 2020 it will plateau and then it will begin to grow.”
Other areas
Presentations from Jetex, UAS and Airbus gave views on FBOs and the importance of trip planning. Lasse Rungholm, CEO, OPMAS touched on Brexit, commenting that while much is still unknown, “30,000 British pilots have applied for an Irish licence.” And Jeff Lowe, Managing Director, Asian Sky Group, ruefully suggested that “if you think things are bad here, you might want to come across to ABACE and see how thing are in Asia. That might cheer you up.” It was another interesting and informative day, hosted by Alasdair Whyte and the Corporate Jet Investor team, whose parent company Specialist Insight has just won the Queen’s Award for Enterprise for International Trade 2019.
