Business jet movements will hit an all-time high at Dubai South this year as traffic floods into the emirate for the World Expo and the Dubai Airshow, according to the UAE’s bizav point man at Al Maktoum International Airport (DWC).
“This is the best year we ever had for private jet or business jet movements,” Tahnoon Saif, CEO of the Mohammed bin Rashid Aerospace Hub (MBRAH), told AIN. “Due to the closure of certain countries and the restrictions on commercial flights, [private jet usage has increased]. We achieved 21 percent growth last year. We are expecting to reach 15,000 movements for full-year 2021, partly due to the Expo and Airshow taking place at the same time.”
As for business aviation’s transition from Dubai International (DXB) to DWC, Saif said it was not for the UAE authorities to promote the move, but charter operators and FBOs themselves to guide travelers.
“Some Expo delegations are landing in DXB and some in Abu Dhabi, but the majority are coming through the VIP Terminal at MBRAH,” he said. “We look at the numbers, and we work with partners to secure parking, ensure fuel supply, and meet expectations. We are trying to attract the movements here by enhancing the customer experience. The charter companies, at the end of the day, work with the FBOs. It is for them to guide the charter companies.”
Saif said that MBRAH did far more than cater to the general or business aviation segment. “We have other [interests], like MRO and maintenance, an education cluster, and commercial activities,” he explained. “The first to mature has been the business aviation ecosystem or cluster. We have good activities in maintenance and are now developing commercial activities, as well as a new project where we are working with partners to be announced shortly—Dubai HeliPark. Located adjacent to the VIP Terminal, it will support VIPs who want to commute domestically.”
One major Dubai South resident, Empire Aviation Group (EAG), sees excellent prospects for the business aviation market, as the region, and particularly the UAE, leads the recovery from the coronavirus pandemic, managing director Paras Dhamecha told AIN in a pre-show interview.
“We are always looking to innovate and improve our services and operations and we are also looking at expanding our market presence,” he said. “We recently appointed a new director of aircraft sales and acquisitions to lead the development of this service, which is a core element of our asset management approach.”
The group’s fleet stands at just under 20 aircraft, including three Global 6000s, four Gulfstream G650s, and three Legacy 650s. “Our aircraft sales service extends to global markets and we do see opportunities for buyers to acquire pre-owned aircraft in an active market,” he said. “Global demand for business jets has been increasing with the recognition of the benefits of private aviation, creating new and sustainable opportunities in sales and acquisitions. We complete several business jet transactions each year and recently completed two sales in India.”
He identified a growing interest in the long-term leasing of charter aircraft for two- to three-month periods. “[W]e are seeing higher utilization of our managed aircraft on charter,” he noted. “We have also aligned with the growing source of demand for charter and recently introduced a new ‘Luxury Partner’ program combining private jet travel with luxury travel partners.”
Holger Ostheimer, managing director of DC Aviation Al-Futtaim, one of the leading FBO-MRO facilities at Dubai South, told AIN that indications from international business leaders and various OEMs suggest a move toward outright purchases of business jets. “In the current aircraft market, pre-owned or newly purchased, there has been over the last six months at least a very active market for purchase,” he said. “Buyers seem encouraged to buy outright rather than finance.”
The trend had led to a depletion of the pre-owned stock. “Values have increased in the course of this year,” noted Ostheimer. “This may encourage the manufacturers in turn, to accelerate production again. This may [prompt] people to come and see the aircraft available on display at the airshow. For instance, if you were [hoping] to buy a new aircraft, you’d be looking at a 24- to 48-month period between ordering and delivery.”
Danbury, Connecticut-based Global Jet Capital (GJC) said the lack of available inventory has resulted in sellers receiving multiple bids for aircraft within a very short period of time. This shortage had resulted in aircraft resale values starting to tilt higher than in 2019. From GJC’s perspective, the speed at which transactions closed had increased dramatically.
“Sellers’ time frames require us to work closely with our prospective clients to get their financing approved and closed without any delay,” Simon Davies, GJC’s sales director for the UK, Middle East, Africa, Turkey, India and Eastern Canada, told AIN. “Naturally, we would not want our clients to lose their target aircraft due to sellers’ impatience for financing to complete. This timing concern has resulted in us pre-approving certain clients for financing even before they find an aircraft to purchase.”
As the industry moves past major travel restrictions imposed due to Covid-19 concerns, the Middle East has reasserted its position as a major user of private aircraft. However, Davies seemed unconvinced by any suggestion of a “new normal.”
“The shortage of available aircraft is driving many people to charter while still seeking to acquire their own aircraft,” he said. “Users in the Middle East have always preferred aircraft ownership over chartering someone else’s aircraft. I expect that this preference will continue to drive new acquisitions in the region for a while to come.”