Corporate jet market rebounds in Middle East

Corporate jet operators were eager to tout their latest aircraft this week at the Dubai Airshow and were equally excited to discuss the turnaround that they have seen in their business so far this year.

Abu Dhabi-based Royal Jet said it is on pace for record profits this year despite the challenges in the market, as it has enjoyed a 30% rise in flight hours and a 32% jump in revenue in the first nine months of the year.

'It will be a record year for us across our fleet,' the company's president and CEO, Shane O'Hare, told AMEInfo.com. 'We took a pragmatic approach to the recession; we didn't hide under the bed. We decided to move forward with a number of new strategic initiatives including the opening of our base in Jeddah and acquiring a new Boeing Business Jet.

'We've also become far more attuned to the customer needs in the market, particularly in terms of pricing, so we've introduced our own revenue management system that adapts pricing to market fluctuations, which I think is an industry first.'

O'Hare said demand is largely being driven by the government sector, partly as a result of the Arab Spring, as the unrest has led to a number of crisis meetings across the region that have attended by high-level officials travelling by private jet.

Saudi Arabia, UAE and Qatar driving demand

Switzerland-based VistaJet also said it is expanding its fleet in the Middle East in response to strong demand for its services across the region. 'Whilst Saudi Arabia is currently driving 70% of our traffic in the Middle East, we expect demand to increase from across the region particularly from UAE and Qatar, so that by end of 2012 I would see the Middle East representing around 15% of our revenue,' said Thomas Flohr, the company's founder and chairman.

ExecuJet also says it is enjoying stronger aircraft sales in the region and has added two new aircraft to its regional charter fleet. Andrew Hoy, ExecuJet's managing director for Aircraft Trading, said there are several factors that are driving demand.

"The narrow body market has been the hardest hit and is going to take the longest to recover. We are seeing signs of a recovery and I believe that flat is the new growth. If you stay flat, then you are winning. We have seen prices come down and are hitting a point that is more affordable, so people are coming and taking them.

'There is a trend toward larger aircraft. People in this region don't like to bend down to get into an airplane. You get on Aero 45 you have to crawl into the back. Also it's because people are travelling more internationally from this region. They want to go direct from here to Europe and the US, so they do that on these bigger airplanes,' Hoy said.

A drop in the price for pre-owned aircraft is also boosting sales. 'Pre-owned airplane prices have come down to the point where why would you buy a new smaller airplane when you can buy a very good quality bigger one. It's also about keeping up with the Jones's and having the biggest toy that you can have on the runway,' he noted.