The Middle East Business Aviation (MEBA) conference and exhibition emphatically imposed itself on the international airshow calendar with a strong debut at Dubai’s Airport Expo Center. The event attracted 2,401 visitors, as well as some 90 exhibitors from 20 countries and 31 aircraft. It also generated $907 million in new aircraft orders.
By way of comparison, the first European Business Aviation Convention & Exhibition, held in Geneva in April 2001, drew some 3,500 visitors, 190 exhibitors and 28 aircraft. Considering that the fast-growing Middle East bizav market is still some way behind where Europe was six years ago, the scale of the first MEBA show was widely considered by industry participants to be impressive.
The show is backed by the new Middle East Business Aviation Association (MEBAA) and will be held biennially. The next show will be held over the span of three days from November 23 to 25 next year and will most likely return to Dubai (although officially some other Middle Eastern venues are still being considered).
Alison Weller, director of aerospace with MEBA organizer Fairs & Exhibitions, said that business aviation will continue to feature prominently in the biennial Dubai Air Show, which is held in November of odd-numbered years. (The next event takes place from November 11 to 15.)
According to MEBAA officials, business aviation in the Middle East stands to more than double in size over the next six years. Growth in executive charter is expected to be a key factor and is predicted to account for 40 percent of all activity.
MEBAA Up and Running
The management team of MEBAA has been up and running since December. The association expects to be accepted for membership by the International Business Aviation Council by next month. MEBAA now has 35 members, and its founding chairman, Ali Al Naqbi (who also manages Abu Dhabi’s Amiri government flight department), expects this roster to surpass 130 by year-end and reach 350 by the end of 2012.
According to Al Naqbi, there are currently around 350 jets based in the Middle East, operated by some 130 countries. More than 50 percent of all this activity is based in Saudi Arabia and the United Arab Emirates, but he predicted that bizav’s base will expand in the coming years. He said that one of MEBAA’s first priorities is to develop a comprehensive database of business aviation in the region since its exact parameters are currently unknown.
Like its European counterparts, MEBAA faces an ongoing campaign to improve access to airports and airspace for business aircraft flying in the region. According to the new association’s president and chief executive, Ammar Balkar, operators still face excessive bureaucratic delays when securing landing and overflight permits for some Middle Eastern countries.
MEBAA officials also want to support improvements in ground handling infrastructure for business aviation in the Middle East. Reporting some easing in the issuing of handling licenses in countries such as the UAE and Jordan, Al Naqbi told a press conference, “We need to persuade governments that business aviation isn’t just for the elite.”
At least in the UAE, the government seems to be absorbing this message. In a keynote address to the MEBA conference, Her Excellency Sheikha Lubna Al Qasimi, the country’s minister of economy, conceded that the Middle East’s regulatory environment has not kept pace with what modern business aircraft can contribute economically.
“The regulation around business aviation is still very much a gray area in the Middle East, with increased cooperation required between civil aviation authorities in each country to ensure that business aviation is not just tolerated, but welcomed and catered to,” she stated, conceding that negotiations about issues such as landing rights are still impeding industry growth.
Sheikha Lubna reported that there are now more than 1,200 private flights in the UAE each month. She estimated that each $30 million jet generates about $2.7 million in annual expenses (in terms of salaries, parking, insurance, maintenance, permits and so on). “So if civil aviation authorities around the region can collaborate to foster a more efficient and streamlined, unified approach to managing business aviation regulations, we all stand to benefit,” she said.
This message is also not lost on HH Sheikh Ahmed Bin Saeed Al Maktoum, president of Dubai’s Department of Civil Aviation. He told the conference that business aviation could be a key driver of further economic growth in the Arabian Gulf states but only “if we give it a helping hand.”
He called for further “open skies” policies to free up access for business aircraft operators and a more enlightened attitude to new infrastructure, emphasizing that Dubai will lead the way with its new Dubai World Central airport–a vast development that includes a dedicated bizav complex with capacity for some 100,000 movements per year.
Sheikh Ahmed’s support for business aviation is all the more significant given that he is also chairman of Emirates Airlines and therefore stands to lose high-yield first class passengers to this mode of transportation. He told MEBA delegates that airlines should see bizav as complementary to their services and urged carriers to be more competitive and imaginative in offering premium services.
Another campaign that MEBAA will wage is to persuade Middle Eastern banks to stop being so conservative about financing business aircraft purchases. In the association’s view, too many financial institutions still fail to understand that this equipment generally appreciates in value, unlike the airliners they continue to fund, which begin losing value as soon as they roll out of the factory.
MEBAA members received an early boost on the financial front with an announcement by Samir Abdul Ahad, assistant general manager of the Abu Dhabi National Insurance Company. He told operators that a group of leading insurance firms are combining to offer MEBAA operators special premium rates for hull and liability cover.
Saudi Operator Signs Record Deal with Raytheon
Saudi Arabia’s National Air Services (NAS) signed the Middle East’s largest ever deal for business aircraft with an order for 20 of Raytheon’s Hawker 750 (a shorter-range version of the 850XP). The contract is valued at $250 million and NAS–the international launch customer for the 750–expects to receive the first aircraft at its Riyadh headquarters during the fourth quarter.
NAS is the operating partner for the NetJets Middle East fractional ownership program. However, the company has not confirmed whether or not any of the Hawker 750s will be operated for NetJets or whether they will be used solely for its own charter services. NetJets Middle East’s new CEO, Howard “Skip” Geddes, participated in the signing ceremony. In January, NetJets ordered 30 Hawker 750s and 18 Hawker 900XPs.
The operator has an aircraft management arm and operates all-first-class scheduled services through its Al Khayala Airlines division. Later this year, it intends to launch a new low-cost airline in Saudi Arabia. The NAS fleet already includes 33 business aircraft, among them eight Hawker 800XPs, and a mix of Airbus ACJs, Boeing Business Jets, Gulfstream IVs and Dassault Falcon 2000s.
The Hawker 750 will provide NAS with a 2,100-nm range that will allow it to operate anywhere in the Middle East (with sufficient legs for multiple city-pairs) and into the Indian subcontinent, North Africa and southeastern Europe. Its eight-seat cabin is about the same size as that of the Hawker 800 and will feature a modern interior derived from that of the new 400XP.
NAS expects increasing demand for business jets smaller than the ones it currently operates and indicated that the Hawker 750 is ideal for new Middle Eastern charter customers, adding that it believes those customers will not tolerate much less than midsize cabin dimensions. “The region’s economic trends are all pointing upwards, and demand for aviation services is expanding in line with such growth,” commented NAS chief executive Taher Agueel.
NAS Buys Gulfstreams, Too
Separately, NAS also sealed a $50 million deal to buy two Gulfstream IV-SPs that will be offered through the NetJets Middle East program. Financing is being provided by the Royal Bank of Scotland, which has said it is seeing strong growth in demand to support business aircraft transactions in the Middle East. Donal Boylan, head of the UK bank’s aerospace and defense division, told AIN that leases are becoming increasingly attractive in this marketplace.