Dubai Air Show

Royal Jet To Issue RFP To Replace BBJs in Next Two Months

 - November 15, 2013, 4:00 AM
With an eye on expansion, Royal Jet is looking to replace its six BBJs this year. In contention for the role are Boeing’s BBJ Max (based on the 737 Max) and Airbus’s A320 neo.

Abu Dhabi’s Royal Jet, the commercial luxury private-jet operator, is to issue an RFP for the replacement of six Boeing Business Jet (BBJ) aircraft within the next two months, as it seeks to expand regional charter operations in the Middle East, Africa and beyond.

Speaking with AIN in the Seychelles at the official opening of Air Seychelles’ VIP FBO at Mahé International Airport, CEO Shane O’Hare said all options for the airline are on the table. “The RFP will determine the gravitation. There has been a very close dialogue,” said O’Hare. “Comprehensive planning goes on, [on] capital requirements, [with] shareholder involvement. There has been a very heavy consultation with the OEMs. The OEMs are very professional, very active.”

Royal Jet (Chalet A39, A40) announced late last year that it would be moving to replace aircraft in its fleet in 2013, but complex negotiations with OEMs, principally BBJ, Airbus Corporate Jets, Bombardier Business Aviation and Embraer Executive Jets, had led to delays in its fleet replacement program, O’Hare said. Royal Jet announced in late 2012 that it would be placing orders for the replacement of six BBJs in its fleet in 2013.

“We are still the largest BBJ operator in the world,” O’Hare said. “The RFP will be in two months. That’s up to the shareholders, but we would expect [an order to go out] by the end of the first or second quarter next year.” Royal Jet is owned 50 percent by Abu Dhabi’s Presidential Flight Authority and 50 percent by Abu Dhabi Aviation, whose fleet is composed largely of helicopters.

“Boeing is coming with the BBJ Max, the 737 Max. Airbus is coming with the neo. Both manufacturers will have business jet versions of those aircraft. We have our RFP ready to send to the market…the renewal process will commence in 2014 for RJ.”

As speculation has mounted this year that Royal Jet may sever its traditional ties to the U.S. manufacturer, O’Hare has continued to insist that the bidding process will be open, and that all players involved will have a chance at winning the important Royal Jet order. However, privately, Abu Dhabi Aviation officials close to Royal Jet’s chairman, Sheikh Hamdan bin Mubarak Al Nahyan, a member of Abu Dhabi’s royal family, insist that Royal Jet will continue to be a major Boeing customer in future.

O’Hare said the size of the fleet would remain at nine aircraft. In addition to six BBJs, Royal Jet operates two Gulfstream G300s and one Learjet 60. “We are in a good place as far as the type of aircraft we operate. We believe right now that six [large aircraft] is our optimal number,” he said of the BBJs. “We look at where the demand is. It’s hard to tell now because of the market dynamics.

“Europe is very flat. The Middle East is starting to grow at three, four, six percent. The U.S. is quite flat. It’s hard to get a trend on where these markets are going. In emerging markets, India has a lot of infrastructure issues that prevent good growth of private aviation, but Asia is coming up strongly. It’s a relatively unstructured industry and we are trying to gauge the actual requirements. But we think six, seven [large private jets] is optimal for us over the next five years.”

In June Royal Jet took delivery of a second BBJ refurbished by Sabena Technics in Bordeaux, France, but O’Hare said he expected a third aircraft in the fleet due for a refit to be disposed of instead of being put out to tender for refurbishment. “We’ve refurbished our second BBJ in a $15 million program in Bordeaux. That came back to us June. We got a lot of good feedback after the refurbishment. Technologically it’s a very advanced aircraft now,” he said, referring to amenities such as GSM, wireless capability, video-on-demand, flatbeds, a bedroom, as well as space for 40 passengers.

“The market’s been buoyant,” said O’Hare. “We have been very aggressive in the market. We’re very happy with the way that’s going. We’ve just started refurbishment of our FBO [at] Abu Dhabi [International Airport], which will be finished by the end of the year.”

While Abu Dhabi International has been the focus since the company’s inception in 2003, O’Hare is looking to transfer the company’s operating base to Al Bateen Executive Airport, and to that end signed an MoU in May. A plan for the UAE military to withdraw from Al Bateen in the next few years is under way and that will create extra space for new hangarage and other facilities.

“The trick for Royal Jet is to build operations over time at Al Bateen, [since] we…expect there to be increasing congestion at Abu Dhabi International. It is growing very quickly. Part of it is about the availability of infrastructure to enable us to operate efficiently and cost-effectively. We do operate [at Al Bateen] but our longer term desire is our own infrastructure,” he said.

“Commercially we operate [at Al Bateen] on demand. The FBO is DhabiJet. If our customer requests Al Bateen, we go to Al Bateen. But the longer term for Royal Jet is having our own structure [there]. We are exploring the MoU with [Al Bateen management] and this would involve having a principal operating base [there]. It’s a work in progress.”