Five-year 40% annual growth predicted for Mideast's business aviation sector

Contributing to a panel discussion on the future of business aviation at the Middle East Aviation Outlook Summit in Abu Dhabi, Shane O'Hare told delegates that an increasing region-wide realisation of the cost-effectiveness of private jet travel is fuelling sector growth.

"Our research points to a 40% annual increase in the Middle East's business aviation sector for the coming five years with Saudi Arabia and the UAE driving the momentum," he said. "Saudi Arabia is currently leading the surge but the UAE is catching up very fast.

"In addition, the emerging markets of India and China will record similar growth rates and with the Middle East being central to these markets and Europe, it is well placed to serve their growing requirements."

During the panel discussion, led by Ammar Balkar, President of the Middle East Business Aviation Association, O'Hare said throughout the Middle East's expanding corporate sector there is increasing acceptance of the "potent commercial proposition" of business aviation.

"Airport congestion, security concerns and the inability of scheduled carriers to fly in a timely manner to specific destinations due to bilateral restrictions are characteristics of the commercial sector which the time-sensitive corporate traveller increasingly wishes to avoid," explained O'Hare.

"Take the case, for instance, of senior executives who may wish to travel from the UAE to Saudi Arabia for a three-to-four hour business meeting and return the same day. It is virtually impossible on the current available scheduled services which, because of bilateral restrictions, can only reach three airports in the Kingdom. If these executives fly with a commercial carrier they have to weigh up the cost of business class tickets, overnight accommodation, executive down-time, airport transit time - and when these are all added up and compared to the cost of a Learjet 35 at around $3,500 per hour - the maths makes sense. Add to the equation that the private jet may be able to carry three or four passengers on the single flight on a bespoke, point-to-point itinerary and return the same day and the result is a highly competitive proposition. It is this realisation which is fuelling growth."

O'Hare said the region's business aviation potential is encouraging new players into the market.

"Six major operators are looking to come into the market in the next few years," he said.

O'Hare added that Royal Jet, currently the Middle East's largest charter supplier with a 16% market share, is gearing up for major expansion in readiness to service increased demand and counter new competition. The Abu Dhabi-headquartered luxury flight services provider, the region's largest and most established business aviation player, has a five-year plan which embodies fleet growth, a major interiors overhaul, a highly pro-active sales structure and uncompromising commitment to service excellence.

In addition, said O'Hare, Royal Jet is working closely with the Abu Dhabi Airports Company (ADAC) to ensure that business aviation moves well up the agenda on the provision of appropriate infrastructure for private jet and charter operators.

"We need the correct facilities to service growth," he said. "Often business aviation in this region has been left to fend for itself because its requirements are more specialised. Infrastructure support has been missing in this part of the world. ADAC has a willingness to look at new models and we are working closely with it to advance our specific sector needs."

Royal Jet, which is now celebrating its fifth anniversary under the guidance of its Chairman His Excellency Sheikh Hamdan Bin Mubarak Al Nahyan, is currently the third largest user of facilities at Abu Dhabi International Airport where it operates a dedicated fixed base operation and from where it flew to 350 destinations last year alone.

Despite challenges facing the sector, including over-regulation, the region's business aviation segment is maturing and being recognised for its potential as an economic driver, said O'Hare.

"One example is that the financing of aircraft is becoming easier," he told delegates. "We are finding that there are some key financial institutions in the region are responding well. They are increasing their knowledge of the mechanics and complexities of the financing of private jets so funding is becoming easier."

Royal Jet's five-year plan envisages a fleet of more than 20 aircraft - up from the current 12 - with expansion mainly centred on large-to-mid-range capacity airliners.