The Middle East business aviation market has not exploded in the way some predicted a few years ago. As with Dubai's overheated economy, forecasts for executive jet travel in 2008 and 2009 became vastly hyped, and the combined impact of the global slump, the crash of the emirate's property market and later the chaos of the Arab Spring proved a sobering correction. New entrants with weaker business models and unrealistic ambitions have been forced out, and better-established survivors forced to rein in expectations.
Today, many of these survivors feel the market has settled into steady, if unspectacular, growth. Competition among aircraft management companies for new aircraft joining Middle Eastern registries is fierce, but charter demand is solid, especially for large-cabin and airliner-size jets. A lag in maintenance and hangar capacity means infrastructure is continuing to expand, and executive versions of Airbus and Boeing widebodies are still popular with Middle Eastern ruling families.
AJA operates an ACJ318 along with two Embraer Lineage 1000s and two Legacy 600s
Ali Al Naqbi, who heads the Middle East Business Aviation Association - organiser of the MEBA show - is upbeat about the health of the industry. "Many companies have slowed down or gone under, but we knew this would happen," he says. "However, the big, solid operators are busy. The third quarter was strong and the last quarter will be good. Traffic and flying hours are up 12% from last year."
One operator that has adjusted its business plan is Al Jaber Aviation (AJA), based at Abu Dhabi's Al Bateen executive airport. AJA operates five large jets - an Airbus ACJ318, two Embraer Lineage 1000s and two Legacy 600s. "When we started in June 2009, we had planned for 13 aircraft by now," admits chief operating officer Mark Pierotti. "But that's it for the moment."
However, he believes AJA is creating a reputation for quality. "We've become established as one of the world's leading operators of private aircraft," says Pierotti. "We are a little bit more expensive because of our brand, our team, our service. The customer may fight on price but once on board, service is everything, especially if he has been let down by someone else. Our catering is that bit better, our cabin crew are highly trained. We get a lot of return business. VIPs talk to each other. You don't let them down."
Saudi Arabia - relatively protected from the global downturn by high oil prices and with an elite that travels frequently to Europe, the USA and Indian Ocean resorts - represents 60% of AJA's customer base.
To supplement its charter business, the company is looking at other potential revenue streams. Managing third-party aircraft is one option - maintenance is another. "We have our Part 145 licence," says Pierotti. "We don't have a hangar yet but it is in the business plan for Al Bateen. There is demand for it."
AJA's biggest rival - and veteran of the Middle East charter market having been founded a decade ago - is Royal Jet. Chief executive Shane O'Hare says the company is "having a very good year". The world's biggest Boeing Business Jet operator, with a fleet of six, the Abu Dhabi company reported its "best summer in Royal Jet's history", with flying hours across its fleet up 19% compared with the same period in 2011. O'Hare predicts the business jet market across the Gulf will grow about 6% this year. "That's faster than anywhere except the emerging markets, albeit from a small base," he says.
Royal Jet - which has been undergoing a refurbishment programme across its BBJ fleet - is also looking at new revenue models. With a tendency of some Gulf VIPs to "travel further afield", especially to emerging markets such as China, and the Middle Eastern market "maturing", the company is considering alliances with overseas business jet operators to create a global network of services.
However, O'Hare says Royal Jet's focus will remain the Middle East. "We want to develop and continue to grow this market," he says. Another likelihood is a move into third-party maintenance. Royal Jet's facilities comprise a VIP terminal at Abu Dhabi's international airport, but the company is "actively working" on a plan to develop hangars and a maintenance capability. "We hope to announce something around MEBA," says O'Hare.
Another charter and aircraft management provider enjoying a strong 2012 is Dubai-based Empire Aviation Group. "There's been a lot of positivity. The charter market has picked up. Indicators are very good," says co-founder and executive director Paras Dhamecha. The company, founded in 2007, manages a fleet of 20 aircraft - four of them on charter - and also offers brokerage and aircraft sales services.
Earlier this year, Indian maintenance specialist Air Works made a "strategic investment" in Empire. The move will give Empire a platform to develop its business in India, where Air Works operates from 14 cities. "We have become their aircraft management and charter arm," says Dhamecha. "They want to replicate in Bangalore what we do in Dubai."
With 148 privately-owned jets and 220 turboprops, the third-party aircraft management market in India is a "huge opportunity", says Dhamecha, because the concept of outsourcing the running of a private jet is still rare, and most businesses employ their own flight departments. Already, he says, Empire has won four management contracts with "three to four others in the pipeline".
Other charter operators remain cautiously optimistic. "Our business is trending up quite significantly," says Stuart Wheeler, chief executive of Dubai-based brokerage Air Charter International. "We saw some green shoots last year and this year there is a lot more activity." The company specialises in placing airliners and crew on wet leases. Africa, says Wheeler, is the latest "hot area" in terms of demand for executive aviation.
Younger business aviation markets such as India and Africa perhaps provide the biggest hope for the sector in the Middle East. With regional demand growing modestly, the United Arab Emirates' geographical position and status as a centre for business aviation means its service providers are well placed to exploit these areas where demand is expanding fast but infrastructure and support is in its infancy.