MEBAA Convention News

Dubai and Gulf Business Aviation Developing Rapidly

 - December 12, 2018, 1:03 AM
Forty percent of business aviation activity is said to be taking place Dubai International Airport (DXB).

Much debate has taken place about the extent of the transfer of business aviation activity from Dubai International Airport (DXB) to Al Maktoum International (DWC). Opinions vary over the extent to which current movements are taking place at DWC, where 60 percent of activity is often said to be taking place, compared to the 40 percent of flights at DXB.

“I don’t think that is the current situation," said MEBAA chairman Ali Alnaqbi. "I think [business aviation] movements at DWC are now much greater than DXB. I was expecting less than 10 percent [at DXB, after the move]. Unfortunately, when Emirates [Airline] released more slots for us, the percentage went back up. I think it is 20 to 25 percent at DXB versus DWC [at the moment]. Our plan is to go to DWC and I am always going to push for [this solution]. A separation of operations doesn’t really help very much. It is better to operate from one place.” 

He added that business aircraft slots are still available at DXB. “People can still fly from DXB rather than going to DWC. That has had a positive influence, in our view. But as an association, we would like everyone to operate from one place.”

Standalone FBOs are now operated at DWC by DC Aviation Al-Futtaim and ExecuJet, while Jetex Flight Support, Jet Aviation, and Falcon Aviation share the facilities at the VIP terminal. ExecuJet and Jet Aviation still operate FBO-MRO services at DXB, but insiders suggest these operations could terminate by 2020.

“It depends on slots, but we see 60 percent of movements in DWC and 40 percent in DXB,"  Adel Mardini, president and CEO of Jetex Flight Support, told AIN. "By the end of 2020, we expect 95 percent of movements to be at DWC and 5 percent at DXB. The slot restrictions are becoming more difficult [at DXB].”

He said that the Jetex FBO at the VIP terminal is attracting good clientele. “All the major aircraft operators in Europe use us: NetJets, VistaJet, Global Jet, and TAG Aviation are all our customers. In addition, locally, Empire Aviation Group are one of our customers. We have the biggest share of the international market here. As for Abu Dhabi, anyone who goes to Al Bateen will not come to Dubai.”

DC Aviation Al-Futtaim (DCAF) is another FBO operator closely monitoring the situation. “What I see is that the summer has been very quiet," said managing director, Holger Ostheimer. "I wish the migration would continue to close the gap from what was indicated some time ago. According to information we have, DXB is increasing its airline capacity, certainly towards 2020.

“That being the case, we certainly see more and more business jet operations being redirected to DWC. We have no official source of data for flight activity in DXB but believe it is probably around the 60-40 ratio [DWC-DXB]. We are reasonably comfortable with the numbers that we see at the moment.”

“It has been relatively successful," said Catherine Buchanan, chief commercial officer at Vertis Aviation. "Initially, I was skeptical, because of the location. But the majority of clients appears happy to go to DWC. Even though the airport is slotted, obtaining slots is never an issue, unlike DXB. The facilities are fantastic. It has been quite successful. 

“Five FBOs are absolutely enough," Buchanan continued. "We have clients who choose different facilities with different attributes. It is completely dependent on the client. One of the FBOs would be more tailored to the Arab clientele, while another, with a ‘Western’ interior, would be more suitable for European clients.”

“We only have two aircraft still operating at DXB," Paras Dhamecha, executive director at Empire Aviation Group, told AIN. "Traffic flow to DWC has become a little easier now and there is a lot less congestion in the air at the airport. The customers have no issue to be there. We had one aircraft owner who decided not to go to DWC but preferred to go to Sharjah, closer to where he was physically located. When you have customers going in and out of Abu Dhabi, they will use Al Bateen. It’s a good airport. Being in the management business, most of our owners are in and around the bigger cities, and there are several individual aircraft owners in Abu Dhabi.”

“In terms of volume, [the Gulf] is quite a small market still. In terms of [aircraft] value, it’s a significant market," said Oliver Tebbit, a partner at law firm Watson, Farley and Williams. "It’s more stable than flat. It’s not particularly bullish right now. Deals are definitely getting done and some big new aircraft are being delivered into this region. There is also some fleet renewal going on. Are absolute numbers going up? Probably not. Are values going up particularly? Overall, I don’t think so," said Tebbit.

“We are seeing some people who are getting their first new aircraft. I think there is a bit of growth, but there are still people selling aircraft and not replacing them. I think there is some potential growth in the market, but it’s still quite small.”

Tebbit remains guarded on the UAE outlook. “I think people are quite cautious about saying anything too optimistic because the realities of the market haven’t been able to support much optimism for a while. Gama Aviation is building a new hangar at Sharjah Airport. DC Aviation Al-Futtaim has just opened its second hangar at DWC. Falcon Aviation is opening a new FBO at DWC,” he said.

“These operations are run sensibly, investing and growing. But it is not dramatic and the pool of aircraft owners is quite small, even if people are occasionally joining it. Families generally prefer to continue to travel privately once they have started doing so, but it’s not always the case that they continue to use an aircraft enough to justify full ownership rather than chartering aircraft when they need to travel.”

Dubai South’s support for the growth of business aviation facilities has been praised by industry participants. “We are very happy with them. Dubai South is not a landlord, they are a partner," said Mardini. "They are always open to new ideas. Their target is to build more awareness of this airport and about general aviation here. In Dubai and the UAE, there are still many people who have no idea what’s going on here [at DWC]."

“We believe from Dubai South that there are plans to build several more hangars," said Dhamecha. "There is some talk about having an aviation-related business park. There is an advantage to being close to new aircraft and new operators and it is a lot more convenient when you are right there. I think ultimately we are going to move there. With the right official support, we’d seriously consider it."

“Dubai South plays a very significant role in promoting the type of business we are in," said Ostheimer. "Speaking to the relevant government entities, there have been very useful discussions, and these discussions very clearly addressed what we would expect or would like the [authorities] to adjust."

“Qatar Executive serves the royal family [at Dubai South], although it used to be separate and standalone," said Vertis Aviation's Buchanan. "Qatar Executive and Qatar Airways have all become one entity. I don’t know too much about Kuwait, as they don’t do too much charter. It’s the same in Bahrain. The Omanis have their own presidential flight [operation]. The main Emiri flight countries are Qatar, Saudi Arabia, and the UAE."

Buchanan also noted, “There are more government delegations that charter in the Middle East than in Europe. I think European governments tend to have their own fleets. That is also the case here in the Middle East, but they don’t seem to utilize the aircraft as much. There is much more third-party charter. Often, royal families here are considerably larger. So, the third cousin is allowed to charter, but has no access to the main fleet, only to charter hours,” she pointed out.