The Middle East Business Aviation Association’s efforts to help regulators take the initiative on pressing business aviation issues in the region, such as oversight and the gray-charter market, have helped to create debate in the Gulf, a market that is one of the most important to aircraft manufacturers.
In his seven years as MEBAA’s founding chairman, Ali Al Naqbi has become the industry’s key regional personality and has taken several steps to strengthen processes, organizing events and conferences, inviting international players to participate in the advisory process, initiating block deals to soften the blow from insurance coverage, and explaining the challenges and opportunities facing the industry.
MEBA 2014, the sixth edition of MEBAA’s flagship conference, is to take place December 8 to10 at Dubai World Central’s Air Expo, which saw its first-ever event when the Dubai Airshow was held there in November 2013. Two years ago, MEBA 2012 attracted more than 7,500 visitors from 84 countries, as well as 385 exhibitors. Al Naqbi said various initiatives were put in place at the last event to foster cooperation between government and the aviation authorities, in particular to effect uniform maintenance approvals.
In another development, MEBAA (Booth 2243) has persuaded a leading U.S.-based aviation organization–the General Aviation Manufacturers Association (GAMA)–to set up an office in Dubai. “MEBAA and [GAMA] have announced a joint initiative to help transform the regulatory environment,” Al Naqbi said. “Likewise, MEBAA has partnered with Kenyon [Kenyon International Emergency Services, the leading worldwide disaster response company–Ed.] to improve emergency response capabilities that will culminate in a guidance manual for Middle East and North African operators.”
MEBAA’s second Saudi conference took place in Riyadh on April 10 this year and built on the first event, held in Jeddah in June 2013. It provoked lengthy discussion on ways to snuff out the gray market and improve governance, which has left regulators–already stretched by dizzying growth in scheduled commercial aviation–fighting to keep up with market developments.
Some industry participants even feel that time allocated to the debate could be extended. Hardy Butschi, vice president and general manager, Jet Aviation Dubai, was among those calling for the Saudi conference to be lengthened to two days to permit fuller discussion of issues of mutual interest. “One day is overloaded for what you can really discuss. Operations, FBOs, insurance are very important. The maintenance part was not [considered] at all.”
The regional business aviation market, currently valued at $493 million, is expected to be worth $1 billion by 2018, while the region’s installed fleet is set to expand from around 500 aircraft today to 1,300 aircraft by 2020, Al Naqbi said. MEBAA expects the Middle East and Africa regions will take delivery of almost 2,000 business jets in the period 2012 to 2031.
Al Naqbi’s efforts have been unstinting in the gray-market area. “MEBAA has been lobbying the International Business Aviation Council (IBAC) to prioritize and address illegal charter,” he said referring to a blight that is thought to affect around 30 percent of regional flights every year.
Kurt Thomas, director general of IBAC, also addressed the gray market at the Riyadh conference. “The gray market or illegal flight or operations, black market, whatever the name, [looking at] the growth of private aviation in MENA, there is no specific percentage [on the size of the gray market]. We all know it is very active in the region. Other parts of the world recognize that our region is very active. We are trying to put a mechanism in place to reduce the percentage. I know we are not in a position to kill it totally, but we aim to reduce the percentage to a minimum,” he said.
Addressing remarks directly to panelist Ismaeil Al Blooshi of the UAE’s General Civil Aviation Authority (GCAA), Al Naqbi said, “We are not talking about safety. You authorize aircraft to fly. We take it for granted that they are safe to fly. Our market is being destroyed by these [gray-market] activities. That’s why we need your help and infrastructure investment. The person who doesn’t have license to fly is gaining. We know the sky is safe. We know you are doing everything possible to make the skies safe. We are not debating this. But we have a market that is getting penalized, and if we lose that market, we will also be affected.”
The Middle East business aviation insurance market received a boost with the launch of MEBAA Aviation Insurance Scheme (MAIS) at MEBA 2012. At the Riyadh conference, aviation insurance experts said that Middle East-based business aviation companies need to adopt more stringent procedures to deal with an adverse underwriting environment.
In addition to MEBAA, MAIS participants include UAE insurer Abu Dhabi National Insurance Co. (ANDIC), business aviation insurers AIG and Willis–the world’s largest aviation insurance broker, which, in 2011, entered into a joint venture with the UAE’s Al Futtaim Group known as Al Futtaim Willis Middle East. Al Futtaim is one of the UAE’s leading consumer-services conglomerates.
MEBAA introduced the MAIS plan to give members preferential insurance terms and, as of late last year, cover had been issued to seven MEBAA members for a fleet of more than 55 aircraft with a total value of about $1 billion.