Rizon Protests Block On Handling Business in Qatar

 - March 2, 2013, 3:45 AM

Rizon Jet is considering legal action in its bid to overturn efforts by Qatar’s Civil Aviation Authority (QCAA) to prevent it from providing handling for third-party operators at its Doha International Airport headquarters. The Qatari company has claimed that after supporting its 2011 investment of approximately $137 million in a new private terminal, the CAA then ordered it not to use this facility for third-party handling. Rizon now says it is “facing hindrances that make it impossible to sustain a viable business in Qatar.”

According to Rizon, the QCAA not only approved the development at Doha but actually instructed Rizon to make the facility large enough to be able to accommodate other business aircraft operators. But then, within seven days of the March 2012 inauguration event, the authorities demanded that Rizon stop handling operations at the FBO, claiming that it had been providing handling contrary to the terms of its approval.

However, Rizon Jet CEO Capt. Hassan Al-Mousawi said that he has provided documentary proof that the handling services in question had in fact been provided on its behalf by Qatar Aviation Services–a subsidiary of government-owned flag carrier Qatar Airways, which also owns a competing business jet charter company, Qatar Executive. Following a QCAA investigation, the authority told Rizon Jet in November 2012 that it would block all future applications to use its Doha terminal for third-party flights. The QCAA has also blocked Rizon’s requests for a travel agency license and to be allowed to add third-party flight support services to its portfolio.

Al-Mousawi told AIN that the QCAA restrictions are contrary to high-level government policies that call for more private-sector involvement in the air transport sector. He indicated that efforts to block Rizon’s expansion are motivated by a desire to protect the commercial interests of Qatar Airways and its subsidiaries. Neither the Qatar CAA nor Qatar Airways responded to AIN’s repeated requests for comment.

The Middle East Business Aviation Association (MEBAA) was notified of the matter in late January and chairman Ali Al Naqbi expressed support for Rizon Jet and a willingness to intervene with the QCAA to seek resolution. On February 11, MEBAA, of which Qatar Executive also is a member, issued the following update on its involvement in the case:

“As a member of the association, Rizon Jet has rightfully approached MEBAA and presented its case history. MEBAA has subsequently offered its assistance to help its member build a bridge and create an effective means for communicating…concerns with the Qatar Civil Aviation Authority and thereby help influence a positive response for both parties. As an impartial observer MEBAA has therefore made contact with the QCAA and brought the matter to the attention of IBAC [the International Business Aviation Council] face-to-face in Canada, always with the intention of creating a sustainable and competitive environment in Qatar that will facilitate increased adoption and accessibility for business aviation in the Middle East. When MEBAA has collated the facts and consulted the respective stakeholders to the point that it can make an informed recommendation, it will consult both parties accordingly.”

Bizav in Doha

Last year there were approximately 80,000 movements at Doha International Airport and only some 1,500 of these involved business aircraft. According to Rizon Jet, its own aircraft accounted for 300 of the movements and its new FBO accommodated these, along with another 400 third-party movements.

Al-Mousawi said that the QCAA’s ban on the FBO providing handling services has effectively undermined the commercial case for its new facility. In his view, this leaves Rizon with no choice but to raise prices for other services to uncompetitive levels or operate at a loss.

While praising Qatar Airways for its role in opening the Gulf state’s economy, Al-Mousawi clearly resents what he sees as anti-competitive government interference in the country’s emerging business aviation sector. “They [Qatar Airways] have a monopoly and the ear of the authorities,” he told AIN.

Rizon argues that no matter what proof it provides to QCAA to show that the company has not breached the terms of the approval for the new facility, officials simply issue a new set of allegations as a reason for continuing the ban on handling activity. In fact, Al-Mousawi indicated that it could accept a decision excluding it from handling revenue, as long as it could be assured some income to compensate for the use of its FBO.

Having received its air operator certificate in May 2009, Rizon is also active in aircraft charter and management, as well as having extensive maintenance capability. In addition to the base in Doha, it has a substantial FBO complex at London Biggin Hill Airport.

Al-Mousawi said that Rizon wants to allow more time for a negotiated settlement with the QCAA before resorting to legal action, and he suggested that independent arbitration could be an option. “We believe we would win the case but there would be a considerable cost in terms of time and it would not be healthy for our relationship with the regulator,” he concluded. “We shouldn’t be in a position where we have to make a [legal] case against a regulator who is supposed to be there to ensure a level playing field.”