EBACE Convention News

Charter Business Sees Growth in Wake of Abraham Accords

 - June 8, 2021, 9:03 AM
Minister of Foreign Affairs for the United Arab Emirates Abdullah bin Zayed Al Nahyanisigns, Israeli Prime Minister Benjamin Netanyahu, and Minister of Foreign Affairs of Bahrain Dr. Abdullatif bin Rashid Al-Zayani at the Abraham Accords September 15, 2020.

The signing of the Abraham Accords, the peace treaties between Arab states the UAE and Bahrain, and Israel, last September, has intensified interest from charter operators in flights between Tel Aviv, Dubai, Abu Dhabi, and Manama. With an improvement in relations between the Jewish state and Morocco and Sudan also in the offing, the potential payoff could turn out to be substantial.

As scheduled airlines labor to exit the Covid-19 downturn, the peace dividend, which is likely to see up to 50 commercial flights a week between Israel and UAE when the pandemic ends, has been slow to materialize. With UAE sovereign funds and other actors reportedly keen to invest potentially tens of billions of dollars in Israeli technology startups and so-called agri-tech, and Israelis flocking to Dubai out of sheer curiosity, movements of business jets between the two countries appear set to grow.

We are certainly finding a lot of Israelis here in Dubai now,” Hamish Harding, chairman of Dubai-based Action Aviation, told AIN. “They have all come over here, they’re looking at property and really getting into the UAE lifestyle.

"I’m not sure how many UAE [nationals] have gone to Israel. I’m not seeing that. It’s really been very much tourist business movement into the UAE, which is what UAE has always wanted. They wanted the world to come to UAE and invest here and live here. And that model has worked.”

Not surprisingly, given the UAE’s ground-breaking peace overtures have not always been popular in the Arab world, data on movements are difficult to source. In a very limited snapshot, AIN understands that from September 2020 to this past March, 107 business-jet flights left Dubai International Airport for Israel, with 112 in the opposite direction. That less than a third of these movements took place in 2021 was probably more due to new Covid restrictions than a diminution of interest.

“Everybody is very upbeat about the Israel story,” Paras Dhamecha, managing director of Dubai-based Empire Aviation Group (EAG), told AIN. “We have had discussions with management companies and aircraft owners in Tel Aviv. I understand from the airports in Dubai and the FBOs that there has been a lot of traffic, [but to] be frank, we haven't operated any flights in or out of Israel as yet.”

Management of Israeli aircraft is on EAG’s agenda. “We are in talks with people to take aircraft on management, based out of Tel Aviv, but nothing is confirmed yet,” he said. “The situation also became a little more difficult in the last few months due to Covid. I think once things start opening up, we'll see a lot more traffic. There are a few very well-known and busy companies in Israel. Our approach to the market has been to partner with some of the right people there.”

Mark Hardman, CEO of Dubai-based RightJet, said the peace agreement had been a boon to the launch of its operations earlier this year. RightJet offers private aircraft charter, sales, leasing, and management supervision services.

“RightJet is certainly seeing new opportunities since the signing of the Abraham Accords toward the end of 2020 [from] a new and very informed client base accessing the UAE,” he said. “These clients are aware of the benefits of private jet travel and [are] looking for charter solutions, whether it's within region, in Africa, or elsewhere. This has led to RightJet seeing a number of new inquiries, which we wouldn't have historically expected. It's been really quite pleasing and a bit of an upside, given the Covid situation.”

Some regional operators are unlikely to see benefits from the peace deal. Sameer Hdairis, accountable manager for Arab Wings in Jordan, saw only minimal upside. “There will be direct flights between the countries involved and Tel Aviv, with possibly some overflights over Jordan. In some cases, there may be requests from businesspeople who want to travel, but don't have their own local providers.”

Simon Davies, the v-p of sales for the UK, Middle East, and India for Global Jet Capital, said significant business jet sales stemming from the accords appeared unlikely. “Global Jet Capital has been present in these markets from before the diplomatic thaw, and we will continue to serve these markets in the future,” he said. “The biggest beneficiary of the thaw to date has been the tourism sector. This may suggest an increase in charter flights, but it is unlikely to translate into a significant change in acquisition levels in its own right.”

Jeffrey Emmenis, a partner at Vertis Aviation in Switzerland, told AIN the peace deal was an incredible step towards harmonizing the region. “We were one of the first companies to do a direct flight from the State of Israel to Abu Dhabi, using a Challenger 350,” he said.

“Subsequently, we've done quite a few flights since," Emmenis added. "However, the political landscape is difficult—you now [sometimes] need to do political stops in Jordan or Larnaca to carry on to the Gulf, which you didn't have to do in the past. It's very changeable, but I see there's a lot of interesting movements between Israel and the UAE. I imagine once Morocco opens up, there may be additional movement on diplomatic levels. I imagine a lot of travel from Israel to Morocco.”

Airline schedules and customer destinations impacted charter significantly. “It depends as always on who the customer is. If our customers are traveling for sensitive military projects that they're dealing with the government for, or perhaps sharing of technologies and things like that, they may charter and then take the opportunity to join a commercial flight somewhere further afield.”

Despite the accords, certain flights are still unable to fly directly from Israel to the UAE, as a flight plan that indicates the state of Israel as origin can lead to problems with overflights of Arab territories. “What you would have to do is physically land in either Amman, Cairo, or Larnaca, and change flight plans,” he said. “Then you fly to Abu Dhabi, or similar. It's called a political stop,” according to Emmenis.

Although Saudi Arabia is said to be edging towards peace with Israel, the issue of overflights of the kingdom—the shortest route between Israel and the UAE—has yet to be resolved. “It's 50-50. Being granted overflights through Saudi Arabia is unpredictable, [and] the situation is fluid,” Emmenis said.