Region ripe for growth of bizav

 - October 17, 2006, 12:58 PM

The number of business jets registered in Middle Eastern countries has grown by about one-fifth over the past 10 years. By the standards of other still-emerging markets such as Europe (which had 45-percent growth during the same period), the Middle East’s 18-percent fleet growth is not exactly earth-shattering. On the other hand, it is markedly higher than the 8-percent hike seen in Asia–a market over which most business aircraft makers are now salivating.

But these figures from London-based aircraft data specialist Airclaims tell only part of the story because they ignore the significant numbers of aircraft registered outside the region but owned by Middle Eastern companies and individuals. The national aircraft registers of countries such as Switzerland, Bermuda, the U.S. and the Cayman Islands reveal one of the key characteristics of Middle Eastern business aviation: it is extremely low-profile.

Airclaims data released to AIN last month show jet registrations in 15 Middle Eastern states rising steeply around the turn of the 21st century before settling into a steady progression. At the end of 2000, there were 204 jets in the region, and over the course of the following year that total climbed to 221 before edging up to the 229 aircraft on record at the end of last year. In fact, even more recent statistics showing registrations through the end of August reveal that six more jets have arrived this year, bringing the current total to 235.

Not Just a ‘Royal Barge’

At first glance, there appears to be little in these rather pedestrian jet registration figures to bolster the belief that the Middle East is poised to become an oasis of business aviation prosperity. But closer examination of the data tells another story that bears out the long-held contention of business jet sales people that the region’s customer gene pool is growing as local customers buy into the notion of the business aircraft as a purely pragmatic tool of commerce rather than as a royal barge. This trend is manifesting itself in the rise of the number of purpose-built business jets in the region, as against gilt-edged converted airliners.

Bizjet builders have markedly increased their market presence in the Middle East. Factoring in the August 31 registration data, Gulfstream now has 52 jets in the region, followed by Bombardier (29), Dassault (28), Cessna (13) and Raytheon (5). In fact, adding the heritage British Aerospace 125/Hawker series to Raytheon’s cluster takes the U.S. airframer’s total to 18.

Even the market’s newcomer, Embraer, now has one of its Legacys operating in Kuwait. Among the new jet arrivals in the region are Gulfstream’s G300/G400/G550; Cessna’s Citation Bravo, XLS, Sovereign and Excel; Dassault’s Falcon 900EX; Raytheon’s Beechjet 400A; and Bombardier’s Global 5000, Challenger 300 and Learjet 45.

These manufacturers now account for almost 55 percent of aircraft delivered to the Middle East, a trend that has diluted the complete fleet dominance by VIP-configured airliners a decade ago. Only Gulfstream and Dassault had any meaningful market share in 1995, and the intervening years have also seen the withdrawal of other out-of-production types such as the Lockheed JetStar, the Rockwell Sabreliner and the older British Aerospace 125s.

Importantly though, Boeing, which has added the Boeing Business Jet to its airliner-class VIP portfolio over the past decade, still accounts for almost a quarter of the Middle East’s executive/royal fleet with 55 aircraft. Airbus boosted its market presence during the same period but still has plenty of ground to make up with just 14 aircraft in this segment.

Saudi Arabia continues to dominate the region’s business aviation fleet with half of the Middle East’s jet registrations. But this total has barely fluctuated by more than half a dozen aircraft over the past 10 years, suggesting that this deeply conservative country may not be the market’s most fertile territory for the future. Saudi Arabia currently has 100 jets registered, down from its 2002 peak of 106.

The United Arab Emirates holds second place in the region with 32 jets–approaching three times the dozen aircraft registered there in 1995. Four aircraft have joined the registry since the end of last year. Bahrain, Egypt, Iran and Israel boast the Middle East’s other double-digit bizjet fleets.

Further evidence of the Middle East’s growth potential for business jet sales comes from Airclaims’s tally of average aircraft ages. The average age for the whole region now stands just shy of 17 years–almost two-and-a-half years older than the average in 1995. Unsurprisingly, the region’s geriatric jets are to be found in Iran (average age 28.89 years), Iraq (26.38), Lebanon (31.75) and Syria (23).