The Middle East presents plenty of opportunity for business aviation growth, and at last month’s Abu Dhabi Air Expo businesses reported that their investment in the region–and beyond–is paying dividends.
Abu Dhabi Aviation (ADA) has seen the size of its owned fleet increase to 62 aircraft in the past 12 months, as it took delivery of seven new Bell 412s, with an order for six more now being implemented. During last month’s Abu Dhabi Air Expo show at Al Bateen Executive Airport, the charter operator’s commercial director, Khalid Mashhour, told AIN that three more of the helicopters were due to be delivered by the end of last month.
As it continues its global expansion, ADA is focusing on two major markets: Indonesia and Africa. “In Indonesia there are several different contracts [available] for mining, offshore and support,” Mashhour said. Two contracts were signed there recently, involving eight aircraft. “In Africa, mining and offshore operations [predominate],” he said. “Mozambique is one of the places we are looking at, but…Nigeria is our main concentration. There have been [many] changes there recently. We’ve always been watching [it]; it wasn’t very encouraging, but it has changed over the last few months.”
Mashhour said he is now more optimistic about market conditions in Nigeria, as the government has tightened safety and security regulations in the last six months. He claimed that these changes will see many aircraft barred from operations for safety reasons, he said. In his view, the return of Canadian Helicopter Corp. to Nigeria has been an important sign that authorities are tackling regulatory issues.
ADA believes that the Nigerian business aviation market is set to grow by as much as 50 percent a year, and that, as things stand, there is insufficient capacity to meet the needs of expanding industry sectors such as oil and gas. Mashhour believes that the next step will be a wave of partnerships between foreign service providers and Nigerian firms.
Middle East Opportunities
Closer to home, the Gulf Cooperation Council’s largest economy is still booming, according to ADA. “We are opening an office and registering a company in Saudi Arabia, a huge market that has just opened up,” explained Mashhour. “The first Saudi civil helicopter operator [Saudi Airspace Co.] has just been formed, offering MRO and training.”
In Saudi Arabia, helicopters play a variety of roles, from oil and gas in the offshore Saudi Aramco fleet, to the military, search-and-rescue and medical evacuations. ADA works with the Saudi Red Crescent in emergency medical support roles.
ADA believes it is currently the eighth largest operator in its sector, and it has ambitions to get larger. The company was formed in 1976 under a royal decree to provide air service support to Abu Dhabi’s developing offshore oil industry. In 1982 it became a publicly listed company, with the shareholding split between the government (30 percent) and Abu Dhabi Financial Market (70 percent, consisting of local United Arab Emirates shareholders).
Company chairman Nader Al Hammadi said he is pleased with ADA’s financial showing in 2012, although revenue was slightly down on 2011. “We are expanding all the time. We have a focus of being more present in international markets,” he said. “We are providing the same dividends as last year, a positive sign.”
Meanwhile, Royal Jet enjoyed another strong performance last year, as charter flight hours were up 6 percent for the Abu Dhabi-based operator’s Boeing Business Jet fleet and 27 percent for its Gulfstreams. During an Air Expo press conference, CEO Shane O’Hare reported, “2012 was another stellar year for our company.” He added, “Royal Jet has made a profit since its second year of business. This has been a year of stability and growth.”
The company carried out 630 VIP charters and 230 medevac flights, he said. “This involved 2,818 flights to 149 countries.” The company, which celebrates its 10th anniversary later this year, is 50 percent owned by the Presidential Flight Authority and the rest by Abu Dhabi Aviation.
Royal Jet does not expect to make an announcement this year on its fleet-renewal program. Last year, O’Hare hinted that Royal Jet might not necessarily add to its collection of BBJs, suggesting a possible diversification of the fleet. One BBJ has been out of circulation since last year’s second half for a $9 million refit in France.
Sharing its Air Expo chalet with Royal Jet, Boeing Business Jets made it clear that Royal Jet remains a key customer in what has been one of its key markets. “We’ve had a great relationship with Royal Jet for many years,” BBJ president Steve Taylor told AIN. “They are our largest single customer. It’s a great partnership, but [Shane O’Hare] is facing a business decision that will reflect where his [company] goes. …All I can ask for is a chance to compete for the business. We expect to compete hard to win that business.”
Taylor was pleased to be back in the region. “The Middle East has always been a significant part of the market for Boeing Business Jets,” he said. “We have traditionally sold about 35 percent of our production here in the region, so of course we are going to support any kind of major show here.”
Lately, Middle Eastern customers have shown an appetite for Boeing’s largest offerings. “Last year, for example, we delivered eight 747-8s, and of those eight, seven of them were to customers in this region,” said Taylor. “We have a dozen 787s in the backlog, and the majority of those are also here in the region. We have a customer that just put a 777 in service last year in the region, a spectacular airplane. My opinion would be that there is a market for the big airplanes,” he said, citing the presence of a 767 operated by Comlux Aviation for charter in the region.
Overall, the Middle East is a significant customer for BBJ, with 31.4 percent of BBJs ever ordered, or 65 out of the 207. The company’s 737-derived BBJ has been its biggest seller, with almost a quarter of orders, or 38 out of 156, operating in the Middle East.
Separately, Switzerland-based maintenance and completions group Amac Aerospace announced on the eve of Air Expo that it had been approved by the UAE’s General Civil Aviation Authority to provide continuing airworthiness management organization support for UAE-registered aircraft. This will involve Amac in monitoring and supervising maintenance checks, as well as implementing regulatory requirements, including regular airworthiness reviews for UAE third-party customers.
After just over 12 months in operation, the Gama group’s Sharjah International Airport FBO has seen an 89 percent year-on-year increase in business aircraft traffic. The airport is emerging as an alternative to crowded Dubai International Airport.
Gama, which is also active in aircraft charter and management, secured its local air operator certificate in 2010 and opened the Sharjah FBO in February last year. It manages a fleet of Airbus types, Hawkers, Challengers and Legacys for the UAE market.
“Many people forget how much business traffic there is into Sharjah,” said Dave Edwards, Gama’s managing director for the Middle East and Asia.
Gama has hangar space at the airport, as well as a UAE-approved Part 145 maintenance facility for Bombardier and Hawker Beechcraft aircraft. “We are talking about getting Legacy line coverage at the moment,” he told AIN.
While the company also operates some third-party services at the new Dubai World Central airport, Roberts said Sharjah will remain the focus. Now the company is seeking to establish an AOC in Switzerland and hopes to have this in place in the third quarter.
Abu Dhabi-based Rotana Jet has taken delivery of three aircraft in the past 12 months and expects to announce further orders soon, although it would not divulge their nature at this stage. In addition to a Gulfstream G450, two Embraer ERJ-145 50-seaters and an ACJ319 joined the fleet last summer.
“There are orders, there are expansion plans,” said Brian Martin, accountable manager and director of flight operations at Rotana Jet, who took over the running of the company eight months ago following the departure of former CEO Philip Markham last year.
Rotana Jet also launched internal flights in the UAE last year. “We operate scheduled and charter flights of increasing frequency,” he said. “Our scheduled services operate out of Abu Dhabi International [Airport] and Al Bateen and can be booked online. You can book flights into and out of Abu Dhabi to Al Ain, Fujairah, Sir Bani Yas and Delma Island.”
Martin is impressed by the location of Al Bateen Executive Airport, which opened in 2009, eight miles from Abu Dhabi’s spectacular Corniche. “Al Bateen Airport is probably one of the few airports in the world located so close to the city center, providing the perfect entry point to the UAE,” he commented.