Middle East companies delve into bizav market

 - December 30, 2008, 4:03 AM

Al Jaber Aviation’s $1.2 billion order for 21 new aircraft placed during November’s MEBA show in Dubai confirmed the business aviation industry’s hopes that rising demand in the Middle East will compensate for slowing sales in western markets that are more directly affected by the ongoing financial crisis. The region certainly does still have a big appetite for more aircraft, but what MEBA also revealed was that Middle Eastern companies are increasingly taking a more hands-on approach to the development of their industry.

Historically, Middle Eastern individuals and firms have been perceived as somewhat passive consumers of products and services from western companies. Today, local business people increasingly are taking more direct control of their destiny and expanding their business aviation portfolios to include a full array of business aviation services. The newcomers are following in the footsteps of Abu Dhabi’s Royal Jet, which in recent years has established itself as the region’s frontrunner in terms of locally grown, world-class business aviation services.

A prime example of this trend is the new Ajwaa Alalam group formed by MAZ Aviation chairman Mohammed Al-Zeer. The new Saudi Arabia-based holding company includes Ajwaa Alalam Aviation Services, which will focus on aircraft and fleet management services; Ajwaa Alalam Technical Company, which will provide aircraft maintenance services; and Ajwaa Alalam Logistics, which will concentrate on parts and logistics support services.

Collectively, these firms will be the operating arms of MAZ Aviation, which is already involved in purchasing, completions management and aircraft delivery for wealthy private owners in the Middle East.

As part of a $300 million development in Riyadh due to be completed early in 2011, one hangar of about 86,000 sq ft will hold three single-aisle airliners or one widebody, such as an Airbus A340 or Boeing 777, and two large corporate jets, such as a Gulfstream V or Global Express. Two separate hangars of about 16,000 sq ft will each accommodate an aircraft the size of an A320 or BBJ2. Ajwaa Aviation will also be committing some of its budget to buying new aircraft to be operated as part of its own fleet.

Jetex is another Arabian company that is rapidly raising the profile of the region’s business aviation service industry. The Dubai-based company has been active in flight support since it was formed in 2005.

In November, Jetex announced plans to develop an FBO–to open late next year–at Dubai’s new Al Maktoum International Airport. But long before then, by next month, the firm expects to complete the initial opening of its first full-service FBO and at no less a location than Paris Le Bourget Airport–arguably Europe’s premier gateway for private aviation.

“Getting into the FBO business is our main aim now,” Jetex CEO Adel Mardini told AIN. He said that the company chose to open its first base at Le Bourget, where there are already half a dozen established FBOs, because it thrives on competition and wants to prove itself in terms of superior service quality.

Prestige Jet is another fast-growing business aviation group that is climbing through the industry food chain under ambitious local management. In November it launched the Prestige Holding umbrella company, which will control the core executive charter business, and five subsidiaries. These include the new Prestige Invest finance arm and Prestige Flight Ambulance emergency medical operations, as well as its Private Jet Technique completions and maintenance joint venture with Duncan Aviation and a charter brokering division.

Entré to the European Market

The Abu Dhabi-based company has also acquired Madrid-based charter company Flylink Services, which will trade as Prestige Jet Spain and serve as its beachhead to expand into the European market. Also announced in November were plans to develop three new FBOs in Jordan, Bahrain and Qatar (where it has just been granted a commercial aircraft operator’s certificate).

“We have proved that, as a newcomer, we can effectively compete in today’s increasingly challenging market by providing the best possible services,” said Prestige Jet chairman Ghaith Ben Hamel Al Ghaith. “I am pleased to say that we remain on track with our stated strategy, which has allowed us to spread our wings faster and wider than we first planned.”

Meanwhile, also in the United Arab Emirates, Palm Aviation and Elite Jets are expanding their charter and management fleets. Both companies have also confirmed plans to develop their own full-service FBOs at Dubai’s new Al Maktoum International Airport. Dubai-based Empire Aviation Group has confirmed its own plans to establish new bases in other parts of the Middle East.