Dubai 2007: Business aviation hotbed

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The business aviation market centred on Dubai and Abu Dhabi continues to grow, with new names joining the start-ups established in the past few years

Blink and you might miss the arrival of yet another charter operator with big ambitions in the hyperactive United Arab Emirates business aviation market.

This year's Dubai air show will see several new brands make their debut - each one offering a slightly different business model to tap a distinctive niche in a region that will see the arrival of dozens of new business jets this year and next.

While Dubai still dominates the business aviation scene in the Gulf Cooperation Council (GCC) region, Abu Dhabi next door - as in so many areas - has no intention of being left behind.

Formed in 2003, Royal Jet - part-owned by the Abu Dhabi ruling family - remains the dominant business jet operator in the region, its core market VVIPs in the UAE's largest emirate.

With a fleet that includes five Boeing Business Jets, making it the biggest BBJ operator in the world, two Bombardier Learjet 35s and two Gulfstream GIIIs, Royal Jet is still eyeing expansion.

This includes what new Australian chief executive Shane O'Hare describes as "infrastructure developments" likely to comprise maintenance facilities at its base at Abu Dhabi international airport. At the moment, Royal Jet's fixed-base operation at the airport does not include a maintenance hangar.

"Maintenance is on our strategic plan," says O'Hare. "We are well advanced in our plans." Also in the strategy is a push into aircraft management, a growing sector in the Gulf as more corporations and individuals look to specialist companies to make money from their asset's downtime.

"We've really begun to make a serious move into that in the past six months," says O'Hare. Two third-party-owned aircraft are joining the fleet, a Gulfstream GIV and a Learjet 60.

Although the vast majority of its clientele are emiratis, Royal Jet also wants to extend its reach into emerging markets such as India, China and Russia, all growth areas for upscale business aviation, says O'Hare.

Some 15km (9 miles) towards Abu Dhabi city, at the Bateen air base, Falcon Aviation launched last year, initially as helicopter charter operator, with a search and rescue contract for the UAE armed forces, but now with a growing fixed-wing fleet.

Also royally-backed, Falcon's fleet profile pitches it at a very different market to Royal Jet. Its two Agusta 109s, two Eurocopter EC130s and Eurocopter AS365 cater for corporate VIP, tourism and air taxi customers.

A growing fleet

It moved into fixed wing with a Gulfstream G450 delivery this year and at the EBACE business aviation show in Geneva in May placed an order for four Grob SPn business jets. It has also become the biggest Embraer customer in the region with orders for four Phenom 300s, three Legacy 600s and a Lineage 1000. With three more G450s and six helicopters on order, Falcon is well on its way to being the Gulf's biggest operator, in terms of fleet size at least.

Propelling its growth is the ambition of the emirate to diversify its oil-based economy into a major tourism centre. "There are $175 billion worth of approved projects in Abu Dhabi," says general manager Phil Markham, another of the several Australians running business aviation companies in the region.

These projects include a number of premium hotels and a Formula 1 racetrack. However, Markham is quick to point out that future business cannot be taken for granted. "A lot of people are looking at us and saying look how successful we are. But are taking a lot of risk. Without risk there is no reward," he says.

One of the company's biggest advantages, says Markham, is its downtown site. It is the only business aviation operator at Bateen, still a military base complete with uniformed guards at the entrance, but just minutes from many Abu Dhabi head offices. "In this business it is all location, location, location," says Mark­ham.

Plans to develop Bateen into a fully fledged business airport give Falcon an even bigger advantage, says Markham, despite his belief that other operators will move in.

One of them may be Prestige Jet, the newest player on the Abu Dhabi business aviation scene. Privately owned, the company's founders were previously associated with Dubai's Gulf Jet.

Based at Abu Dhabi's international airport, but hoping eventually to move to Bateen, the company expects to have its first aircraft - a 2000-built Bombardier Challenger 604 - on the static park at the air show.

A Cessna Sovereign and the world's first Hawker 900XP in service (a manufacturer's demonstration aircraft) will follow. Prestige has also ordered a Piaggio P180 Avanti and two Grob SPns, due for delivery from late next year.

Although the Middle Eastern business aviation market is focused in the UAE, chief executive Faris Deeb sees big opportunities in the wider region, particularly in Egypt, Jordan, Kuwait, Lebanon, Qatar and Saudi Arabia, and he believes the shorter-range aircraft will have a lot of appeal there.

The SPns and the Avanti will both come with cabin attendant and fixed-door lavatory. "Most of our clients are Arabs and they do like to be served on the flight. When we did research, 92% of potential customers stressed their requirements for a stand-up cabin and lavatory," he says.

While rivals such as Royal Jet target the VVIP market, Prestige's customers will tend to be groups of executives flying business or first class on airlines.

"Look at a trip like Doha [in Qatar] to Dubai. The first class airline fare will be around $1,000. If you have five people then the cost of chartering a P180 is about the same, but without the queues and delays and, because you can select your departure times, you often save on booking hotels too," says Deeb.

New kids on the block

Meanwhile, in Dubai, where international groups ExecuJet and Jet Aviation ply their trade with large FBOs at the international airport, there are new kids on the block too. One of them is Empire Aviation Group, run by the former chief executive of another Dubai business aviation operator Elite Jets, Paras Dhamecha.

With the Hawker distributorship for the Gulf, Empire is positioning itself purely as an aircraft sales and management company, supplying pilots and cabin attendants, but not owning its own aircraft. "There are a lot of companies that claim to be a one-stop shop," says Dhamecha. "We take a purely asset management view of business aircraft."

By the end of the year, Empire hopes to be operating a fleet comprising a Bombardier Challenger 605 and a 604, a Dassault Falcon 900EX, Embraer 600, two Hawker 800XPs and one 850XP. It plans an FBO, possibly at the new Dubai airport at Jebel Ali, due to begin some operations from 2009.

Like Prestige, Empire plans to expand its footprint into the wider Arab world, with sales offices in Bahrain, Kuwait, Oman and Qatar. "We would like to have at least three going by the end of the next quarter," says Dhamecha.

The market in the region is "growing exponentially", he says, with a "three or fourfold increase in three or four years". However, new entrants mean growing competition, and he believes winning business will "come down to little things. One thing that catches people out is integrity. If you have a problem, tell the customer you have a problem. You are only as good as your reputation and you only get one chance at it," he says.

While the market is still strongly concentrated in Abu Dhabi and Dubai, there are major players in the wider Gulf region, particularly National Air Services in Saudi Arabia and Bahrain's Bexair.

With the Dubai air show followed next year by the Middle East Business Aviation event also in Dubai, and demand growing beyond the traditional long-range, large cabin, luxury sector into smaller and more utilitarian jets, the region is likely to be a hotbed of marketing activity by all the manufacturers over the next 12 months.