Three years ago, there was one locally-owned business aviation charter operator in Abu Dhabi - Royal Jet. Today the rapidly-growing and seemingly recession-immune Gulf city boasts no fewer than four. The latest to join the elite grouping - which also includes Falcon Aviation Services and Prestige Jet - is Al Jaber Aviation. The start-up is setting its sights on becoming, alongside Comlux and Royal Jet, one of the world's biggest operators of airliner-based business jets.
Owned by the giant Al Jaber construction and shipping group, AJA began operations with two Embraer Legacy 600s in June and has placed orders for four Airbus A318 Elites and two A319-based Airbus Corporate Jets, as well as five Embraer 190-derived Lineage 1000s and eight Legacy 450/500s. In what AJA's chief operating officer Mark Pierotti describes as an "aggressive delivery plan", about one aircraft is due to arrive every six months, starting with the first Elite in December.
AJA has begun a "heavy" recruitment campaign ahead of its Airbus deliveries, one of the few business jet operators to be taking on pilots and, despite launching in the downturn, Pierotti says the "last four months have been tremendous - our repeat custom is fantastic".
Pierotti is a former engineering manager with Emirates and the Abu Dhabi Presidential Flight, who met company owner Mohammed Al Jaber two years ago. "He wanted to diversify into aviation and we discussed a number of concepts, including low-cost and all-business class airlines," says Pierotti. "We settled on this concept and he asked me to join him full-time."
AJA is far from a glorified in-house operator with a third-party business. Al Jaber's other divisions make up just 1% of revenues and "they pay their bills", says Pierotti. Instead, AJA is targeting mostly local business owners travelling to Europe. Operating Embraer 600s means AJA is, for the moment, having to compete aggressively in a broker-driven market, but Pierotti says the company is obsessive about its brand values. "We have identified 23 touchpoints with the customer, every one of which can make or break AJA," he says.
Like FAS and Prestige, AJA operates from Abu Dhabi's former Bateen air base, now being transformed into a downtown VIP airport. At almost four years old, FAS is a relative veteran of the Abu Dhabi business aviation scene, and, although mainly a helicopter operator, has been steadily branching into fixed-wing, with two Embraer Legacy 600s and two Gulfstream G450s on its charter fleet. It has four Embraer Phenom 300s on order and two Lineage 1000s, the first one due for delivery at the end of 2010.
Its biggest piece of business is a contract to service offshore oil and gas platforms with 10 Bell 412s: it flies up to 70 missions a day around the Gulf. On the corporate side, FAS operates two Agusta 109s and two Eurocopter AS365s, which it is replacing in 2011 with four Sikorsky S-76Ds. Since 2007, it has carried 20,000 passengers on 30min sightseeing flights from Dubai Festival City using four Eurocopter EC130s, and is creating a similar heliport at Abu Dhabi's Marina Mall.
FAS has been expanding its Al Bateen facility: it is establishing a third-party maintenance hangar, servicing Embraer business jets, Eurocopters and Sikorsky S-76s.
Royal Jet - the original Abu Dhabi corporate operator and the largest with a fleet of 10 aircraft, including five Boeing Business Jets - is based at the city's international airport. Despite what chief executive Shane O'Hare describes as a "tough year" - with corporate demand down 30% on 2008 - Royal Jet's head-of-state and medevac business has held up well. So, too, has traffic to Iraq, where O'Hare says economic rebuilding is boosting demand. The Chinese, Indian subcontinent and North African markets are all too coming back strongly, he says.
© Royal Jet
The company - which also operates a Gulfstream IVSP and two G300s, as well as a Bombardier Challenger 604 and Learjet 60 - is reviewing its long-term fleet plans, pushing back a target to operate 20 aircraft by at least two years to 2015 because of market conditions. O'Hare says "at least half" the new aircraft will be airliner-derived types. Although Royal Jet is "extremely happy with the BBJwe are talking to all the manufacturers".
Although Abu Dhabi has supplanted Dubai as the centre of gravity of business aviation in the Gulf, the region's original boomtown remains an important hub for maintenance, charter, sales and other services. ExecuJet and Jet Aviation have large fixed-base operations at the international airport's free zone, and two of the biggest locally-owned charter and aircraft management providers, Elite Jets and Empire Aviation are based there. Both have been feeling the pinch as executive traffic to and from the emirate has contracted.
Elite Jets has a fleet of five managed aircraft, ranging from a Cessna CJ3 to a Dassault Falcon 900DX and chief executive Ammar Balkar says charter business is down 30-40% year on year, with the first quarter seeing the biggest impact. But he is positive about prospects. "I think we have hit the bottom. Everything that goes down has to come back eventually and I believe we will soon return to steady growth," says Balkar, who is also president of the Middle East Business Aviation Association. He believes a rebound in the Dubai economy will boost prospects. "I am a strong believer in Dubai, which has laid foundations for a modern city. The Arab world needs cities like this to think positively," he says.
Empire - which has a fleet of 14 managed aircraft, the largest of which is a Gulfstream G450 and 10 of which are available to third parties - has also seen about 40% of its charter business vanish in the past year. Recovery is "sporadic", says executive director Paras Dhamecha, who helped found the company in 2007: "May to July were our best months since we started. August and September were back down, but October has been good again." The company is expecting to grow its fleet by four aircraft by the end of the year.
Empire - which also represents Hawker-Beechcraft in much of the region - has also enjoyed success on the aircraft sales front as falling prices have seen owners seek out bargains in the new and used markets. "In every situation, there are opportunities," says Dhamecha. "We have sold and delivered six aircraft in the past six months."
The grey market - where brokers offer foreign-registered private aircraft for charter that do not have an air operator's certificate - remains a problem for the sector. Although strictly illegal, pressure on rates in the current economic climate increases the temptation to undercut approved operators, and policing it needs a lot of effort by and co-operation among civil aviation authorities."All of us are being impacted by the grey market," says Falcon Aviation chief executive Philip Markham, who says unscrupulous brokers have been offering a Bombardier Global Express at rates his company can't compete with on the G450. MEBAA's Balkar says the association is doing everything it can to tackle the problem with the authorities. "We have had two high-level official meetings and are in the process of setting up a third, but this is something that needs to be done across the GCC [Gulf Co-operation Council]," he says. "It is affecting the industry seriously at the moment is because the overall pie is smaller."