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Royal Jet to finalise $750m aeroplane deal by Q2 2014

Royal Jet, Abu Dhabi’s private jet operator, will finalise its fleet procurement plan comprising seven business jets worth in excess of $750 million by the second quarter of the year, its chief executive officer Shane O’ Hare said.

Company is in ‘detailed negotiations’ for seven business jets

Royal Jet, Abu Dhabi’s private jet operator, will finalise its fleet procurement plan comprising seven business jets worth in excess of $750 million by the second quarter of the year, its chief executive officer Shane O’ Hare said.

Speaking to reporters on the sidelines of the Abu Dhabi Air Expo on Tuesday, he said the company completed a tender in January this year, which was participated by Boeing, Airbus and Bombardier.

Boeing pitched for BBJ1, Airbus Industrie offered bids for its ACJ-A319 and the under-development C series aircraft was offered by Bombardier, which is doing test flights and has not certified as yet. Its first delivery is expected next year.

“We are in detailed negotiations with aircraft manufacturers,” he said. “All the aircraft manufacturers are taking us very seriously, it’s a very open competition.”

Starting from 2016, he said Royal Jet will replace the older aircraft, with complete replenishment by 2020. “The current aircraft fleet is still young, but you have to work in advance.”

About the financing, O’Hare said the board of directors was looking at different options, including leasing and bank loans, but no decision has been taken yet. About the performance in 2013, he said Royal Jet booked 3,500 flights to 145 countries with a flight duration of 9,000 hours despite tough market conditions last year.

“The strong business growth improved profit margins to nine per cent. 2013 was a very good year, we hit our target,” he said.

Talking about operating conditions, O’Hare termed them as “tough”; due to soft market conditions in Europe, the operators from there fished out in the domestic market for business illegally. O’Hare said he doesn’t mind competition, but it must be fair.

The CEO termed the domestic market conditions “cautious”, as the global financial crisis is behind, which has improved the economic growth in the UAE and in the Gulf region which is hovering around five to six per cent.

“We are budgeting six per cent growth this year,” as tough market conditions have put pressure on yields.