BAE Systems predicts rise in regional aircraft market in Middle East

Speaking at the Civil Aviation in the Middle East Dubai Summit, Steve Doughty, Vice President Sales of BAE Systems Regional Aircraft stated that the bulk of the current fleet in the region is being misused on shorter sectors and that as deregulation kicks in and market forces are allowed to form the supply side, then the market for regional aircraft will open up.

Doughty noted that 15 airlines accounted for more than 90% of the total scheduled capacity offered on intra-Middle Eastern services, with Saudia, Iran Air and Emirates accounting for nearly 50% between them due to two large domestic markets (Saudia Arabia and Iran) and a large hub operation at Dubai.

He added that currently regional aircraft of between 50-110 seats account for less than 20% of the frequency and 10% of the capacity on existing intra-Middle East services. Most of these short-distance routes are being flown using single aisle or widebody aircraft.

Yet stage lengths average only 550 miles for the widebody services and 355 miles for the regional aircraft fleet whilst frequency on the 635 airport pairs averages less than 1.5 per day.

BAE Systems contends that as the intra-Middle East market continues to develop through continued growth and deregulation, frequency will develop and aircraft size will inevitably reduce. Frequency is a key competitive selling point for airlines and tends to be higher in deregulated markets, said Doughty.

He added that Middle Eastern airlines are starting to recognise the potential of regional aircraft and some airlines have placed orders for new equipment. However, the embryonic nature of this market means that a cautious approach is prudent.

For this reason Doughty contends that the range of used aircraft offered by BAE Systems Regional Aircraft, together with a suite of integrated support packages might be attractive to airlines in the region. Regional Aircraft is the world's fifth largest lessor by fleet size and the second largest regional jet lessor by fleet value.

In particular, the BAe 146/Avro RJ regional jet (70-112 seats) continues to find favour in mature markets with world-class airlines like Lufthansa Regional adding to its fleet earlier this year. This aircraft is well suited to the Middle East environment with an outstanding interior offering cabin flexibility for first, business and economy class offerings, as well as excellent airfield performance allowing unique access to sensitive city centre airports and to remote and poorly equipped short strip airfields.
The aircraft is already proven in the Middle East with two Avro RJ-85s operating with the Bahrain Defence Force and a further aircraft scheduled for delivery to another operator in the region shortly.