MEBAA Convention News

Action Aviation Maintains Momentum in 2022

 - December 7, 2022, 2:46 AM
Action Aviation chairman Hamish Harding

Having had its best-ever year for business in 2021, Dubai-based Action Aviation has seen more brisk activity in 2022 And after selling 30 new and preowned business aircraft last year, it expects to handle a total of around 25 by the end of this month, according to company chairman Hamish Harding.

“We do the big jets,” he told AIN. “It’s easy to do lots of little mandates on light jets here or there. We don’t tend to do that. Most of our deals are on the bigger jets: higher value, more complicated deals. This year, we will do 25 often fairly complicated, quite large-value deals, sometimes with trade-in aircraft or Action Aviation financing of clients.”

Its business is reliant on relationships Harding has built up over almost two decades. “Partners tend to bring us many of the off-market preowned jets, as we have worked with some of them for up to 18 years and usually have a good collection of most types of jets that we can source when clients need them,” he said. “This sort of gets around the apparent shortages of inventory that are usually found.”

Earlier in the year, preowned and new-production aircraft alike were difficult to locate, but he sees the problem as easing off as inventory improves. “It’s still just as good as last year, which was our best year ever,” he said. “This year is looking equally good at the moment. There’s better availability of aircraft now. Earlier in the year, we had plenty of demand and there was nothing out there, really. Now there are aircraft available. They are still highly priced, so that’s one of the challenges: finding sensibly priced aircraft. But if you can, then they’ll always sell.”

Preowned inventory vanishing to zero has been a feature of the market in the past 12 months, but he said the situation is improving. “I think that’s where it was a few months ago,” he said. “Right now, the market has inventory to offer. For example, there are about 25 Gulfstream G550s available for sale on the market today, although many are at unrealistic prices, so not all are really in play to sell.”

He believes a number of Chinese aircraft are available that are set to enter the market. “Obviously, Russian aircraft are grounded, whether sanctioned or non-sanctioned,” he said. “I think there are people who see a higher price now for their aircraft than they paid for it and they’ll take the prices. It’s pretty positive for brokerage and brokers at the moment.”

However, another issue is causing difficulties in the brokerage market. “The number-one problem we’re facing right now is that you just can’t get pre-purchase inspection (PPI) slots on a sensible timescale. You can’t get the slot times in the facilities. That is a massive problem with doing deals at the moment—at the end of 2022. It’s a global problem. People were getting the last slot of the year in October. People want to buy the aircraft. They won’t get a PPI this year, in many cases, which is a big issue. This year, people may have to buy without PPIs.”

Action Aviation currently owns four jets: a Boeing BBJ, Bombardier Global XRS, Dassault Falcon 900EX EASy, and Embraer Legacy 600, which it manages itself, along with some other customer aircraft. All line maintenance is through Jet Aviation in Dubai.

He sees growth in the region’s business aviation sector. “There are a lot of high-net-worth visitors who come into Dubai long term who aren’t long-term Emiratis but are living here and buying aircraft in Dubai,” he said. “We’re a worldwide business, so preowned aircraft sales are a worldwide phenomenon. It doesn’t make a lot of difference whether you sell the aircraft into a local market you happen to live in or into Columbia.”

Harding also believes the market is calling for a dramatic increase in new metal. “There’s this backlog on new orders,” he said. “As we all know, it’s harder to ramp up production lines than it looks. Supply chains are so difficult these days and spare parts are an issue. We’ve come across lead times on things such as leading edges of six months. You typically can’t get a leading edge for some popular business jet types, for example.”

He notices a strong push from first-time buyers coming into the market in Asia and the Middle East.

“People are waking up to it,” he said. “Charter is difficult to do. I think that’s the main thing. Charter people are awfully busy and charter prices are much more expensive than a couple of years ago. And also, while a particular aircraft may have a published hourly block price of $10,000 an hour and a particular flight might be eight hours round trip, the end price is already substantially more than the obvious $80,000, making real hourly prices a lot higher than people say.”

That is driving people to buy their own jet. “I just met somebody the other night and he’s so fed up with paying $50,000 or more for a round trip from India to Dubai. He asks why. It’s a ridiculous price for a trip in a small jet. He’s now going to look into getting a small jet himself.”

After the events lull, from which Dubai has stormed back this year, the MEBAA Show this week is a welcome prospect, he said. Harding said his firm has attended most major business aviation shows throughout its existence. “We’ll be there as we always are,” he said. “Life is busy and good. There are just so many things going on. The aviation market is so busy at the moment. That’s the challenge: to stay on top of everything.”