Private jet market in Middle East to remain strong on rising demand

DUBAI - Private jet market in the Middle East is expected to remain strong on rising demand as the region continues to recover, ExecuJet Middle East managing director Mike Berry said.

By Abdul Basit

Published: Thu 17 Nov 2011, 11:26 PM

Last updated: Tue 7 Apr 2015, 5:16 AM

Swiss-headquartered, ExecuJet Aviation Group established a base in Dubai in 1999 and was one of the first independent companies to offer business aviation services in the region.

“The market for private jets in the region is well established and continues to expand. There is a growing trend towards larger aircraft which has a truly global reach,” Berry told Khaleej Times in an interview at Dubai Airshow.

Following are excerpts from the interview:

What’s new with the ExecuJet for this year’s Dubai Airshow?

The Dubai Airshow has always been an important trade event for us and we are very much pleased to exhibit once again this year. We will have ExecuJet executives from all regions participating as this show is an important event for all our entities worldwide.

We have added a number of aircraft to our managed fleet including a Challenger 850, 605s — which will be on static display at the Airshow. We have also signed our first Corporate Airliner for management, which commences in January 2012. This Lineage 1000 will be available for charter and further expands the ExecuJet Middle East charter fleet.

How important is this show for ExecuJet to boost its revenues and getting new business?

Dubai’s geographical location, positive tax environment, wealth density and excellent infrastructure for the aviation sector have proven to be significant contributing factors in the recovery and growth of the private jet and business aviation sectors. It definitely serves as an excellent opportunity to showcase and promote ExecuJet’s full range of aviation services. The Dubai Airshow is a very important event in that it allows us to present our services to the wider market. Normally enquiries lead to requests and in turn some of these lead to new business.

What’s the trend in the region?

The demand for private jets is fairly established and the region continues to recover. Saudi Arabia reflects this trend and we see good potential opportunity in the Kingdom for the ExecuJet product. There is a global trend for larger aircraft with Gulfstream 550, Global, Legacy and large Falcons leading the way in the region. However, the smaller Hawker family is also hugely popular for regional operations.

Which segment is growing new sales or pre-owned sales?

The market is actually very stable now and whilst there are still some good pricing within the market out there the “fire sale” ended long ago. Prices in some pre-owned sectors are actually increasing.

How competitive is the Middle East market when it comes to management of private jets?

Aircraft Management has been the biggest challenge with the remnants of the financial crisis. The market had seen a few operators closing down as well as a few owners using the downturn to shop around. A strong service and safety proposition remains key to remaining ahead of the competition. The good news is that we were able to add a number of aircraft to the managed fleet and that we have signed our first Corporate Airliner for management in January 2012. We are also pleased to report that our customer pipeline for aircraft management is healthy with real opportunities to continue ExecuJet’s growth.

How do you see the growth of the private jet sector in the region this year and what are your predictions for the next year?

The market in the Middle East is strong and we believe will remain so. This said, no market is truly independent and Europe and the USA remain important and at this time less than predictable.

Is 2011 better than 2010 in terms of revenues and new business for ExecuJet?

In simple terms “Yes” we have seen improvement across all business units although nowhere near the 2008-09 levels.

What’s the contribution of the Middle East region in total revenues of the company globally?

Unfortunately, as a private company we cannot discuss the actual numbers, but the Middle East has become a key and stable contributor to the overall results of ExecuJet Aviation Group.

What are the challenges for the private jet business in the region?

As always challenge and opportunity are present in equal measure. One of the biggest challenges for private aviation regionally is illegal charter. This charter is sometimes called “grey” but in the eyes of insurers and regulators it is very clear. However, enforcement is not easy and the reputable operators suffer.

The aviation industry has been facing some sort of challenges for the last couple of years. So how do you see the current shape of the industry?

The industry is in a lot better shape than two years ago. There is a renewed focus on quality and sustainability and this serves ExecuJet well.

Do you see same M&A in the industry at the regional as well global level?

Despite expectations there has been no significant M&A within the industry at the regional or for that matter on a global level, however as the recovery continues one would expect a degree of M&A as well as strategic alliances to be announced.

What’s the impact of the Arab Spring on the private jet business?

Business was not materially impacted, we did see an initial increase in requests for charter flights out of certain countries, at the same time we faced challenges with over nights in certain locations or having owner flights disrupted into certain territories.

What are new developments within the company?

The continued development of our presence across Asia and in particular China remains a key focus area. In addition the launch of Simplyfly is seen as a significant enhancement to The ExecuJet service solution. The product is aimed at a key segment of the market and will stimulate demand for aircraft acquisitions and ultimate growth of the managed fleet for ExecuJet.

Do you have any plan for Dubai World Central?

We have land reserved at Dubai World and will develop this when the time is right.

How many AOCs do you have now and how many more in the pipeline?

Presently we have 7 AOCs worldwide (Switzerland, Denmark, UK, UAE, Australia, South Africa, News Zealand). However, this is likely to expand in the coming months.

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