Speaking at the Aviation Outlook conference in Abu
Dhabi last week, experts from the region’s business aviation sector
expressed their confidence that the market would continue to grow during
A panel moderated by Ammar Balkar, CEO Middle
East Business Aviation Association (MEBAA) Mohammed Al Bulooki, VP
of Airline Marketing and Aeronautical Revenue at Abu Dhabi
Airports Company (ADAC), David Hernandez, (Vedder Price), Dr. Mark
Pierotti (COO, Al Jaber Private Jets) Steffen Harpoth (Silver Air
CEO) and Shane O’Hare, President and CEO of Royal Jet, agreed that
the industry had enjoyed exceptional growth in past years. And
while the current economic climate will inevitably restrict
similar growth levels this year, all agreed that the signs are
there for a very healthy 2009.
From Royal Jet’s perspective O’Hare explained
that there were a number of reasons why the company was in a
particularly favourable position, not the least of which is the
fact that the Middle East region itself is well situated to
quickly come out of the economic downturn.
“To a certain degree the Middle Eastern market
has been isolated from the overall worldwide downturn, not least
because of the high level of liquidity in the region and a strong
GDP which is forecast to remain at around 7%,” he said. “Moreover
as a company our strategy of product and market segmentation,
protects us from the worst of the economic turbulence.”
O’Hare also highlighted how long term
opportunities can arise out of difficult economic conditions.
“Part of our growth strategy to the year 2020 is to increase our
fleet in the super mid range by aircraft management as a major
part of our business and we are firmly on track to more than
double our fleet to more than 20 aircraft by the year 2012,” he
“Prices of aircraft are falling dramatically and
corporate jet brokers are telling us that a year ago, there would
be 30 people looking for one airplane. Today there are 30
airplanes looking for one buyer, pushing prices down by 30-40%. We
are looking to add another Boeing Business Jet (BBJ) to our fleet
and as such an aircraft which was priced at $75 million last year
is expected to break through the $50 million price range by year
Similarly aircraft management is another area
that is presenting Royal Jet with growth opportunities.
“Optimizing an aircraft’s usage for a private or
corporate owner within the difficult economic climate provides a
win-win situation both for private jet operators and for aircraft
owners,” O’Hare said.
All of the individual companies’ strategies are
underpinned by the UAE Government’s confidence in the sector.
Mohammed Balooki, ADAC told delegates at the
Terrappin organised event, that the development of the City
Airport (formerly Al Bateen), continues on schedule and all
prospective tenants at the new airport were continuing with their
plans for facilities and there had not been any cancellations.
“We are also witnessing a growth in Fixed Base
Operations (FBO) traffic and as a consequence we are gearing up to
meet this demand,” he said.
The panelists also agreed that demand for
private aviation is much less price sensitive, due not least to
the fact that, for high net worth individuals and corporate
executives, the flexibility they get with private jet travel
allows them to travel when and where they want. As far as they are
concerned it is well worth paying the premium in order to have
their needs met.
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