IN FOCUS: Centre of gravity shifts for business aviation in Middle East as rivals to Dubai airport emerge

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When the Middle East's business aviation market began taking off in the mid-2000s, Dubai International airport was very much its epicentre. ExecuJet and Jet Aviation established fixed-base operations (FBOs) and maintenance hangars at the airport's free zone, where a cluster of office blocks was also home to dozens of brokers, management companies and other service providers.

Now the centre of gravity is shifting. While the free zone remains busy, many of the region's aircraft are taking off and landing elsewhere. This is partly down to the breakneck growth of Dubai International (DXB) and its anchor airline Emirates, which is squeezing business aviation out of landing slots and apron space. However, it is also because other airports and emirates are setting themselves up as alternative hubs for business aviation, offering lower fees, more convenience and less congestion, as well as space for maintenance hangars, FBOs and other support facilities.

dubai airport

The rapid growth of international travel at Dubai Airport has forced many business aviation operators to look elsewhere

These range from Abu Dhabi's Al Bateen Executive, a former military air base in the UAE capital transformed into a dedicated downtown business aviation airport, to Sharjah - Dubai's immediate neighbour is pushing its rather neglected airport as a convenient and fuss-free entry point for the bustling emirate next door.

Further afield, the quiet northern emirate of Fujairah, on the border with Oman, is setting up its first FBO at its small airport, while the state of Qatar is also promoting its business aviation credentials: Rizon Jet has a large FBO at the airport and Qatar Airways' executive offshoot is also based there.

Meanwhile, Dubai itself is trying to create a new home for business aviation at its giant airport complex being constructed near the industrial zone of Jebel Ali on the edge of the city. Maktoum International, also known as Dubai World Central (DWC), is so far only handling a limited number of freight flights, but existing business aviation operators at the crowded Dubai International, as well as new tenants, are being encouraged to locate at the new site. Both ExecuJet and Jet Aviation plan to set up FBOs at DWC in the next two years, while German charter and maintenance company DC Aviation will open a hangar and FBO there next year (see box). The airport is host to this year's MEBA.

Sharjah airport is only 20min drive from Dubai International, but the contrast is marked. While Dubai International teems with Emirates Airbus A380s and other widebodies and tens of thousands of passengers every day, Sharjah is the base for low-cost carrier Air Arabia and a handful of very small airlines.

However, that is precisely why the UK's Gama Aviation chose the airport for its Middle Eastern FBO. Gama took over responsibility for all general aviation movements at Sharjah earlier this year as part of a five-year concession and is handling about 70 departures a month. That figure is "growing by double digits every month", says managing director Dave Edwards. Its two-storey FBO, with lounges and duty-free, is under construction. In the meantime, the company is using temporary facilities and renting two hangars.

The appeal for operators of using Sharjah, however, will not be the facilities in the executive terminal, says Edwards, but convenience and cost. "We are a tenth of the price of Dubai on landing fees, but there is also the time factor. You can land here and be in Dubai city centre in 20min," he says.

In addition, maintains Edwards, turnaround times for aircraft are an average of 30min and "landing to chocks time" is only 6min, while there is plenty of parking for operators dropping their passengers off elsewhere in the region and waiting for them.

Two hours' drive south of Sharjah is the UAE capital of Abu Dhabi. Its international airport is where the Middle East's original VIP charter operator, Royal Jet, has its FBO. But it is the city's former airbase, Al Bateen, that Abu Dhabi wants to turn into the UAE's business aviation gateway.

al bateen airport

Abu Dhabi's Al Bateen airport is in close proximity to the city's business and government districts, its luxury hotels and its new Formula 1 racetrack

One of three main airports in the emirate of Abu Dhabi, Al Bateen's biggest advantage is its proximity to the city's business and government districts, its luxury hotels and its new Formula 1 racetrack. With Abu Dhabi positioning itself as an upmarket leisure and cultural destination, Al Bateen is very much part of that strategy.

General aviation operations - including the helicopter services that carry oil workers to rigs in the Gulf - have for a long time shared the airport with the military and police air arm. But in recent years, Al Bateen has had a facelift with the FBO rebranded as DhabiJet and the executive terminal undergoing a $10 million refurbishment.

Abu Dhabi Airports' (ADAC) other focus at Al Bateen is on real estate, says Mohammed Al Bulooki, chief commercial officer. Military buildings are gradually being converted to commercial use, with $5 million spent on turning a cargo warehouse into a Boeing 737-size hangar.

ADAC is looking for maintenance and service providers to join existing tenants Falcon Aviation Services (see below) and Al Jaber Aviation. Deals have so far been signed with Jet Aviation and Indian maintenance company Air Works - and Al Bulooki is confident of securing more. "This is one of the few places in the region where land and buildings are readily available," he says.

Another airport where plenty of property will be available - eventually - is DWC. Planned to become the world's biggest airport by the middle of next decade, with six runways and surrounded by hundreds of square kilometres of commercial developments, the mega hub is slowly emerging from the desert. The Dubai authorities want the new airport, which began limited operations in 2010, to initially handle the bulk of private flights and be the main centre for business jet maintenance and services.

Despite having just extended its facilities at Dubai International by taking over the former airport-run FBO next door, ExecuJet plans to have a presence at DWC by the end of next year and will soon break ground at the new site. Managing director Mike Berry says the planned airport is impressive: "The infrastructure is amazing." The intention, he adds, is to run both operations "in parallel, slowly winding down at DXB, although we will probably continue to have a presence here".

Its neighbour at DXB and fellow Swiss business aviation services firm Jet Aviation says its "medium-term objective" is to relocate its FBO to the other end of Dubai. "Within five years we expect 95% of Dubai's business aviation traffic to have moved to DWC," says general manager Michael Rücker. Space for business jets, he says, is fast-running out at the existing airport. "Emirates and [low-cost airline] Flydubai are getting three new aircraft a month. One of these is on the stand at any one time. It means that in two years there will be no more room for business aviation."

The UAE's most northerly and remote emirate, Fujairah, is also keen to press its business aviation credentials. Despite not having any scheduled services, the small airport is positioning itself as an ultra-low-cost alternative to busier airports in the region and as a technical or lay-over stop.

At May's EBACE show in Geneva, it signed a memorandum of understanding with Swiss aviation services company Aurora Aviation to take over its executive aviation terminal and ground handling. "In much of the Middle East, parking is scarce and expensive. We can offer the ability to, for example, drop a VVIP passenger in Dubai and then park at Fujairah for three days before returning to pick him up," says Aurora chief executive Ammar Kutait.

Ali Al Naqbi, president of the Middle East Business Aviation Association, welcomes the proliferation of airports in the region. "The more airports we have, the easier it will be for the industry to grow," he says. "We are telling the authorities that if there are too many delays and restrictions coming into the country, we will not get the economic benefits that we are hoping for."

FALCON AVIATION SERVICES SPREADS ITS WINGS IN MAINTENANCE

From taking tourists on helicopter trips over Abu Dhabi to transporting oil workers to rigs in the Gulf and VIPs on private flights around the region and beyond, Falcon Aviation Services (FAS) arguably makes more aircraft movements than any other operator in the Middle East - often more than 50 a day.

The Al Bateen-based company, established in 2006, has a fleet of 31 rotorcraft, including 12 Bell 412s for the offshore business, as well as Eurocopter EC130s and AgustaWestland 109S Grands. It also operates five jets: an Embraer Lineage 1000, two Legacy 600s, a Gulfstream G450 and a Bombardier Learjet 45 air ambulance.

The latest venture is an expansion of its maintenance, repair and overhaul (MRO) capability. Although the company has had a servicing facility at Al Bateen for six years, it has just completed construction of a 5,500m2 (59,200ft2) hangar with adjoining wash bay - the first in Abu Dhabi.

falcon aviation services helicopter falcon aviation services

 Falcon Aviation Services

The hangar - originally earmarked to open in 2010 and with room for five G450s or two Boeing Business Jets - will allow FAS to extend its MRO offering as well as offer covered parking and other services.

"We call it our field of dreams," says AJ Baker, FAS vice-president of commercial business. "We decided to build the facility and then seek work to fill it but as a worst-case scenario, it would fulfil our maintenance needs."

That scenario looks unlikely. "MRO is growing rapidly for us. In fact our problem is keeping the lid on it," says Baker. "We have agreements with every operator at Al Bateen."

FAS is an authorised repair centre for Embraer, Eurocopter and Gulfstream and "provides assistance" to other airframers. With six Lineages in the Gulf region, 20 Legacy 600s and "nine or 10" G450s, Baker is confident of securing plenty business. "If we capture a third of the work, we'll be busy," he says.

While the offshore contracts represent regular, solid revenue for FAS and the VIP helicopter flights are a lucrative add-on - the company runs shuttles for Etihad and has a heliport at Dubai's Marina Mall - the executive jet sector has seen the biggest fluctuation in fortunes for the region's operators. Already competitive, a surge of new players - not helped by a persistent grey market - created overcapacity when Dubai's financial and property sector collapsed in 2009.

However, Baker is upbeat. The large-jet segment in which FAS competes has remained relatively robust and "demand is exceeding our targets", he says. Although yields are lower than three years ago, prospects have been helped by the exit of some weaker competitors. "A lot of people have fallen by the wayside," he says. "The higher-quality providers are still here, although everyone is playing a bit of a survival game."

DC AVIATION PREPARES TO BECOME FIRST BUSINESS AVIATION TENANT AT DWC

DC Aviation will help kick-start Dubai's plans for a new home for business aviation at the under-construction Dubai World Central when the German management and charter specialist opens the airport's first private jet hangar and fixed-base operation in April.

The 8,000m2 (86,100ft2) facility, which will offer aircraft handling, management, charter and maintenance, is a joint venture with Dubai-based trading and property conglomerate Al Futtaim. The deal was announced at MEBA in 2010 and signed earlier this year. Work began in October on the site at the airport's Aviation City development.

"We've taken the prime spot and we'll be the first live operation," says Holger Ostheimer, general manager of DC Aviation Al Futtaim. "We began pouring concrete a few weeks ago and we're in the process of putting together the structure."

Stuttgart-based DC Aviation - formerly the DaimlerChrysler flight department and owned since 2008 by Germany's ATON Group - is one of Europe's biggest business aircraft charter providers. Its fleet of 25 aircraft, almost entirely third-party owned, includes three Airbus ACJ319s, two Bombardier Globals and three 600-series Challengers, a Gulfstream G550 and G450, an Embraer Legacy 650 and a Dassault Falcon 900DX. The company also operates Cessna Citation XLSs and Bombardier Learjets.

In addition, DC Aviation, which was founded in 1999 and employs 150, runs a 5,000m2 maintenance hangar at Stuttgart airport.

The relationship with Al Futtaim came about because DC Aviation was managing the owner's aircraft and is one of several partnerships between European business aviation firms and Gulf-based property companies.

Ostheimer expects an application for a United Arab Emirates Air Operators Certificate to be granted in time for the venture to begin adding managed aircraft to its fleet from the middle of 2013. The business will not be buying its own jets. "We have no interest in owning assets," says Ostheimer.