Abu Dhabi’s New Air Expo Show is Sign of its Business Aviation Ambitions

 - May 3, 2012, 3:55 AM
His Highness Sheikh Zayed bin Sultan bin Khalifa bin Zayed Al Nahyan (center of photo, wearing gold-trimmed dishdasha) tours Abu Dhabi’s new Air Expo show.

Abu Dhabi’s emergence as a leading business aviation hub in the Arabian Gulf was further enhanced by the March staging of the inaugural Air Expo. The event, held at the Al Bateen Executive Airport nine months before rival Dubai’s Middle East Business Aviation show, attracted a reported 10,700 visitors and 105 exhibitors.

Deals worth approximately $270 million were announced, according to the Abu Dhabi Airport Company, which promoted the three-day event with the French organizer of the Aero Expo show in Cannes. The show had a strong leaning toward general aviation, including the support of the U.S. Aircraft Owners and Pilots Association (AOPA), which endorsed the formation of a new United Arab Emirates chapter of AOPA.

Perhaps inspired by this move, Saudi Arabian pilot Sami Al Refai announced his intention to become the first Arabian pilot to fly around the world. His odyssey was due to take off from Al Bateen last month.

Local Companies Gain Traction

More evidence of business aviation’s expansion into the Middle East was provided by the appointment of Qatar Executive as a new Bombardier authorized service facility for the region. The fast-growing private charter division of Qatar Airways already operates several Bombardier aircraft itself.

Saudia Private Aviation (SPA) confirmed its position as operator of the largest fleet of Dassault Falcon 7Xs by taking delivery of its fourth example of the type. The trijet was a prominent feature on Air Expo’s static display line.

The Jeddah-based company believes it is well placed to capitalize on liberalization and infrastructure improvements in the Saudi Arabian aviation sector, led by Prince Fahd bin Abdullah, the new head of the country’s General Authority of Civil Aviation. For example, it expects to see the opening of four new FBOs in the country before year-end, starting with one at Jeddah this month followed by other bases at Riyadh, Dammam and Medina.

According to SPA managing director Wajdi Al Idrissi, there are currently some 350 business aircraft in Saudi Arabia and the company is seeking to persuade more of their owners to let it manage and support them. A further boost is expected by the anticipated share flotation at Saudia Private Aviation’s parent company, Saudi Arabian Airlines. Within three years, the government is expected to sell a 49-percent stake in the flag carrier to private investors in a move that will both raise fresh capital and, conceivably, open new business opportunities.

The new Abu Dhabi show was a prime opportunity for local business aircraft operator Royal Jet to trumpet its achievement in logging a 234-percent increase in net profits for 2011. “It’s the sixth consecutive year of profitability, and was achieved in a hostile economic environment,” commented president and CEO Shane O’Hare. Royal Jet had its origins in Abu Dhabi’s royal flight department but now runs as a private, commercial business working to meet the objectives of five-year and 10-year business plans.

The operator, which fields the world’s largest fleet of Boeing Business Jets (six), a pair of Gulfstream G300s and a Bombardier Learjet 60, has seen especially strong growth in its medical evacuation activity, which has doubled in the past 18 months. For O’Hare, the strong financial results vindicate a major restructuring that he instigated at Royal Jet early last year to help it to “adapt and evolve to the changing dynamics of the business aviation market.” The company now operates from both Abu Dhabi International Airport and Al Bateen Executive Airport, which is the Middle East’s first dedicated bizav gateway.

The average Royal Jet aircraft is nine years old, with a typical projected service life of 16 years, punctuated by refurbishments every four or five years. When looking to add aircraft to the fleet, the company typically seeks equipment between two and five years old. “With our eight-year history, we are part of the success story in creating a benchmark for private jet operators in the region, and globally for that matter,” O’Hare told AIN.

Meanwhile, Royal Jet shareholder Abu Dhabi Aviation (ADA) also achieved improved performance in the financial year just ended, gaining 10 percent on the previous year.

ADA’s main activity is operating helicopters, with a fleet of 54 spread across five continents to support various industries, including offshore energy. It is expanding its business to encompass flight training and maintenance and last year made an agreement to provide local facilities for AgustaWestland. The company is 30 percent owned by the government of Abu Dhabi.

From its base at Al Bateen, rival charter and management group Al Jaber Aviation said it has seen no impact on its business due to fallout from the so-called Arab Spring wave of political upheaval. Most of this has occurred farther north in the region, but COO Dr. Mark Pierotti, the company’s core clientele of royalty, senior political leaders and the super-wealthy are still flying. Al Jaber is now looking to expand its managed fleet as well as its maintenance operations in the region.

Executive charter operator Rotana Jet is a prime example of the sort of business aviation service company being drawn to Abu Dhabi. It relocated its main base at Al Bateen Executive Airport in the third quarter last year, transferring it from Dubai, where the business was launched in January 2011. Its fleet currently consists of a Gulfstream G450 and a pair of 50-seat Embraer ERJ-145s, with a similarly configured Airbus A319 to be delivered in August.

Rotana Jet CEO Philip Markham indicated that the company moved from Dubai International Airport to avoid the constraints of increasingly crowded conditions there. “Executive aviation is about convenience,” he told AIN. “There is not much point in having an aircraft you can leave parked when you want, but then you are constrained by your departure in a rolling slot time because you are operating in and out of an international airport. Al Bateen doesn’t present any of those constraints whatsoever.”

Beyond the continued uncertainty as to when or if business aviation operators will relocate from Dubai International to the new Al Maktoum International Airport, Markham suggested this outcome would not be a positive one for the sector. “[The new Dubai airport] is not the easiest place to get to at 45 minutes’ drive into the city of Dubai. We are 10 minutes away [from the center of Abu Dhabi],” he noted. “[Al Maktoum Airport] will not attract business people who want to get to Dubai, but the emirate of Abu Dhabi continues to grow.”

Charter Market Changes

Markham said that the financial crisis has had an unforeseen benefit in rationalizing a Middle East charter market that had become flooded by excess aircraft capacity by 2007-08. “It has eliminated a lot of the operators that weren’t really serious about the business,” he told AIN. Until recently, he argued, some operators in the region had been cutting corners in terms of regulatory compliance, and a gray charter market developed, with what Markham described as European and U.S. owners who weren’t flying at home repositioning aircraft in the region and illegally flying charters out of Gulf states, a problem that became particularly acute in Dubai. “GCAA [the UAE’s civil aviation authority] and MEBAA [the Middle East Business Aviation Association] have done a lot of work to stamp that out,” he concluded.