Although there was some expectation that VIP charter operator Royal Jet of Abu Dhabi would announce new firm orders for aircraft here at MEBA, Shane O’Hare, president and CEO, said yesterday that the company expects to make acquisitions in possibly six to 12 months. His reasoning is that the inventory of preowned business jets is increasing, bringing prices down on even good-quality aircraft, and that he expects delivery slots to become more available for new aircraft as the global economic crises continues.
To illustrate his first reason, O’Hare said BBJs bought in 2006 for $40 million were selling for $75 million earlier this year and that this price is now decreasing.
Regarding the second, he said that as airlines ground airplanes or fail, he expects that Airbus and Boeing will be seeing a lot more A319 and 737 cancellations, the two models that, respectively, are the basis for the ACJ and BBJ. In addition to these factors, the difficulty in obtaining financing to purchase aircraft and the backlogs of the completion centers are also putting a damper on sales.
Nevertheless, O’Hare said Royal Jet’s plans to operate 20 aircraft by 2012 and 50 aircraft by 2020 are still on track and the company is strong. It has seen annual growth of about 25 percent since its inception in 2002 and at worst he envisions this growth to be in the range of 15 to 20 percent next year. “We are seeing early signs that the corporate market is shifting in the U.S. and Europe, he said. “However, it’s too early to tell the effect of the downturn in this part of the world. Our main business is with high-net-worth individuals and government officials, and we’ve actually seen demand increasing.”
Royal Jet currently operates 10 aircraft, seven of which it owns and five of which are BBJs. This makes Royal Jet the largest BBJ operator in the world. Next April, these airplanes will begin to undergo extensive refurbishment, including the addition new equipment, to the tune of $15 million each. Completions specialist Genesis Corporate Jetliners of Chicago, Illinois, will do the work, O’Hare said.
Royal Jet BBJs To Get the Genesis Touch
Genesis Custom Jetliners, a VIP completion center with facilities around the world, has been tapped for upgrades and redesigns of a number of Boeing Business Jets that will join the charter fleet of Abu Dhabi-based Royal Jet.
Genesis affiliate Goderich Aircraft will handle the refurbishment project at its Ontario, Canada location, adding “opulent” interiors, the latest communication and entertainment amenities and multi-functional meeting areas.
Another Genesis affiliate, DRB Aviation Consultants, will be tasked with programs management, engineering and certification for the project. The finished airplanes will include custom mood lighting, Internet and mobile phone capabilities, and an interior designed with maximum comfort in mind.
“The Royal Jet customer experience in its newly redesigned BBJs will be characterized by the best of the best that is available in the world today,” said DRB president Don Bell.