The Middle East market appears to be picking up as part of a gradual recovery from the downturn, but the turnaround is “generally slower than we would have liked,” according to Mike Berry managing director of ExecuJet Middle East. Certainly the local market is nothing like as vibrant as it was back in 2007-2008, he told AIN but this has not stopped the Swiss-based business aviation services group making the most of its opportunities in a region where it has been expanding from its base in Dubai since 1999 (see box).
ExecuJet (Stand 595) now has 15 FBOs around the world, with the most recent addition to the network being in Lagos, Nigeria. Here at the MEBA 2012 show, it is working alongside rival handling group Jet Aviation to manage the movement of aircraft on and off the static display.
The company’s Middle East fleet numbers 21 aircraft, 14 of which are managed for their private owners. Six of these jets–ranging from a Hawker 800 to an Embraer Lineage 1000–are available for charter. The aircraft it manages are distributed around the region, including in Qatar and Saudi Arabia, with crew usually residing in the same location.
ExecuJet’s base at Dubai International Airport increased in size significantly a few months ago when it took over the Executive Flight Service hangar, formally operated by the airport itself. Two years ago, the company added a second hangar, and it now controls eight separate lounges, additional ramp space and even a duty-free shop.
The company’s Middle East presence has been further enhanced through a new partnership with National Air Services (NAS) to open an FBO at Riyadh’s King Khaled International Airport in Saudi Arabia. At the northern end of the region, it has opened another FBO in Istanbul through a partnership with Turkey’s Bilen Air Service.
“It works for us that we have our base out of Dubai but certainly we will look to the region for what else we can do,” Berry told AIN. “We provide a complete turnkey solution–sales, charter, full maintenance and passenger processing.”
ExecuJet’s maintenance offering also is expanding. “Our maintenance capability has grown steadily over the years so now we’re a full service center for the entire range of Bombardier and Hawker Beechcraft aircraft, and for the Embraer Phenom and Legacy, plus we’re working on the Lineage as well as the [Gulfstream] G200 model [approvals]. We have 24/7 AOG teams also,” explained Berry. In November, for the second year running, ExecuJet Middle East won Bombardier’s authorized service facility excellence award in the international category.
The group started by specializing in Bombardier jets, which Berry said are still the most common in the Middle East. Generally speaking, he said, “Each manufacturer has its own market segment [in the region].” In his view, the underlying trend for aircraft owners to progress up the product chain to acquire larger jets has continued, although it appears to have slowed in recent years.
The strongest call for widebodied business aircraft still comes from Saudi Arabia, which is home to the region’s largest fleet–accounting for as much as 50 percent of the total, according to Berry. “NAS obviously gives us a foothold in one of the biggest markets–and we’ll be introduced to new customers,” he said, referring to the new FBO in the Saudi capital.
“Over the years Middle East customers have become more knowledgeable about bizjets–they are seen as a business tool and there is strong demand for chartering,” reflected Berry. But despite this demand, charter rates remain suppressed following the downturn of 2008.
“With the market being the way it was, cost cutting became quite the thing,” he said. “It changed the market, and rates are currently still below what they should be.” From his perspective, soft flight-hour rates are not purely because of excess available aircraft but also due to some operators “shortcutting standards.”
Among aircraft owners, Berry observed there is “very much a mix” between owners that are happy to allow their aircraft to be chartered and those who want to “fly in it themselves only.” Charterers are also made up of a mix of high-net-worth individuals flying for pleasure–for example, to island resorts in the Maldives or Seychelles, or wealthy Russian tourists coming to Dubai. The business community is also very active, he said.
In Berry’s view, the Middle East business aviation sector is still relatively underdeveloped. “When it’s mature you’ll have dedicated business aviation airports as in the U.S.,” he said. “At the moment there is only one: Al Bateen in Abu Dhabi.”
Further afield, ExecuJet has been expanding rapidly worldwide. In September it signed a joint-venture agreement with a company in Indonesia under which it will manage 13 general aviation terminals around that vast Southeast Asian country.