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Statistics from the Centre for Asia Pacific Aviation show that the corporate market in the Middle East grew at an average of 13% per year from 2000-2008, with the number of private jets based in the region more than doubling in size to 450 over that same period.
At its height, the corporate jet market in the Middle East was estimated to be worth between $500m and $700m a year, but like most industries it has taken a beating with the onset of the global economic crisis.
'This region got a delayed impact compared to other regions of the world, but we are clearly feeling the economic crisis and have felt it over the past few months,' Mike Berry, managing director of Execujet Middle East told AME Info.
'I think there was clearly a shift in demand; you could see it in the charter market. Customers were rescheduling trips to get the most efficient use out of the business jet, where before maybe that wasn't the case. And customers were maybe downgrading aircraft to accomplish the mission,' he said.
Berry estimates that the company's charter business fell 25%-30%, noting that charter prices over the past few months have come under pressure. 'Travellers have been taking their time about finding the right aircraft and the right pricing, so there has been a lot of squeezing on pricing across the region,' he said.
Meanwhile aircraft sale prices have dipped below pre-9/11 levels, and customers are mostly remaining on the sidelines to see how much lower they will go.
Although the downturn has taken its toll, Berry believes that the market may have bottomed out. 'The promising signs are there in the past six weeks. We have seen demand grow for charter aircraft, we have also seen aircraft buyers coming back into the picture. And there have been a few recorded sales around the globe now in aircraft transactions,' he said.
Empire sees 60% decline
The impact of the downturn has been felt even deeper at Dubai-based Empire Aviation Group, which saw its charter business fall 50%-60% beginning late last year and into the early part of 2009, according to the company's CEO Paras Dhamecha.
'Definitely the view has been that when business is doing well, the corporate jet is considered a business tool. But in the current situation every company is being careful with their budgets. The rest of the year is going to be a wait and watch for all corporates,' he said.
Looking at the bright side, Dhamecha said that the company's charter business began to stabilise in March and April, and May and June were some of its best months since the company began in 2007.
'Having said that, we are still not sure we can identify any trend as yet. It's very difficult to make a call, because while the past few months have been steady, every now and then you see a bit of a dip and you don't know where it is going. It's very difficult to strategise on,' he noted.
Dhamecha acknowledged that Empire has lowered its prices for its charter business, but said it was mostly because oil prices have fallen so dramatically. 'Fuel prices had become, in our business, ridiculous,' he said.
The company is confident that sales will revive soon as customers are getting unbeatable deals on aircraft. 'The prices of both new and used aircraft have dropped dramatically.
Jeff Florian, Senior Reporter
