MEBAA Convention News

Ukraine and Ebola Hit Global Bizjet Market, Says Jetex

 - December 10, 2014, 4:00 AM

The head of a leading flight support companies says the twin challenges of the Russia-Ukraine crisis and the Ebola scare in West Africa are adversely affecting the global business aviation market.

“Many Russian clients stopped flying in their jets. IATA sees a 25 percent drop in aviation to Africa due to Ebola,” said Jetex Flight Support CEO Adel Mardini in an interview with AIN. “A lot of our customers cancelled their trips to Africa due to Ebola. Dubai is a hub between Russia and the rest of the world, and a hub between the Far East and Africa. We feel there is a drop in business in these two areas. I hope the world can quickly find a solution to the Russia-Ukraine crisis.”

With 300 employees worldwide, 200 of them in Dubai, Jetex provides flight support in several locations, and made a ground-breaking FBO entry to Paris Le Bourget in 2009. “In the Middle East, the business is growing, and you can see a lot of good demand, especially in the UAE and Saudi Arabia, who are leading the regional market,” said Mardini. “There is minor growth in North Africa, especially Morocco. The Turkish market is big and growing.”

Mardini said Jetex’s customers are mainly in the government and corporate sectors, entailing use of larger aircraft. “In the Middle East, we see good growth for the Gulfstream G650,” he added. “In this region, they are also using BBJs and ACJs, wide-body, long-range, able to carry more passengers. We see ACJs and BBJs going from Dubai to Jeddah or Dubai to Doha. None of our customers wants to make tech-stops when they are flying to the Far East or Europe. All of them prefer long-range aircraft.

“For flights in the GCC [Gulf Cooperation Council], overall, the preferences for locals are Falcon 7X, the Challenger 605 or the Gulfstream G450. I don’t see anything smaller than these types for the GCC area for locals.”

Since its formation in 2005, Jetex has added FBOs at Shannon and DWC, and in October, set up a facility at Miami. “We are looking forward to building a bigger network in the FBO business. We already applied for a couple of locations in the Far East. Hopefully we will make an announcement at ABACE in Shanghai next year,” said Mardini.

A key strategy for Jetex is to avoid, as far as possible, situations in which it has anything less than a direct working relationship with its clients. This approach has driven its willingness to invest in establishing operations key locations, such as Paris Le Bourget Airport, even if this proves to be expensive and challenging.

In Dubai as a whole, Mardini cited a figure of 10,000 business aviation movements a year as being a realistic target. “We expect growth in Dubai as a whole of 20 percent a year for general aviation, depending on growth in the whole area,” he said. “We forecast 4,000 movements at DWC [Dubai World Central] in 2014. DXB [Dubai International Airport] is down: in 2014, we expect to have 5,000 movements, partly due to the summer runway closures.”

Jetex has tried to help operators by setting up credit lines all over the world. It also handles fuel VAT. “We are in a position to handle any AOC holder fuel uplift in Europe. We will bill them on the actual fuel rate without the VAT,” Mardini explained. “The customer pays only the fuel without the VAT. We pay the supplier almost immediately after the invoice, while we have to wait one month for the customer to pay us.”

Mardini said business aviation is growing in Africa. “Nigeria, Angola and South Africa are the main hubs. Gabon is doing very well. ExecuJet built a new facility in Lagos which is doing well,” he reported. In his view, the increased focus of the MEBAA industry association on North Africa would be a boon.