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INFRASTRUCTURE WATCH

Middle East- India and Southeast Asia overview

There can be no doubting the reasons why the western Business Aviation world looks on with great anticipation at developments and growth of the industry in the Middle East- India and Southeast Asia. A survey of operators currently operating within the region reveals a vibrant story…

Middle East
After three years of economic gloom- it looks like a Business Aviation recovery is underway in the Middle East according to the region’s main players.

“July- August and September were record-breaking months for us-” outlines Dr Mark Pierotti- COO- Al Jaber Aviation (AJA). “We’ve flown beyond our budgeted hours per year- and we’re beating our budgeted revenues for those months. Market share has increased and business is GCC [Gulf Cooperation Council]- wide to intercontinental destinations. Although Middle Eastern Business Aviation activity has not yet reached the heights of pre-2008- it is certainly recovering.”

Ahmad Abu Ghazaleh- CEO of Amman-based Arab Wings- echoes Pierotti’s views. “I don’t believe we are at peak levels- but for sure we are better off than 2008-2009. Charter prices are the same as they were in 2008-2010 but volume has increased substantially.” Arab Wings launched its Dubai-based Gulf Wings charter operation last year and according to Ghazaleh- this has out-performed expectations.

Michael Rücker- Vice President and General Manager Jet Aviation Dubai- says Dubai is still the busiest place in the region- and business is back to the good-times of pre-2008. “We see a considerable increase in Falcon 7X deliveries into the area as well as deliveries of Legacy 650s. Next year we anticipate seeing the first G650 to operate in the Middle East.”

For all three aircraft types- Jet Aviation Dubai has increased its capacity by adding more engineers to the OEM support teams to cope with the expected increase in demand.

David Edwards of Gama Aviation- which has the exclusive rights to operate its managed business jet charter and MRO operation at nearby Sharjah Airport- observes it’s all about gaining market share to get the growth. The company positioned in the region two years ago- and experienced no slot problems. Road time to downtown Dubai can be a reasonably short trip via car.

Mark Hardman- ExecuJet Middle East Operations Director- has seen a 20% growth in movements yearon- year at Dubai. “Part of that is due to increased market share- but there is also an increase in Business Aviation movements. The Middle East is bouncing back- and because of the downturn there is a new focus on giving better value and service within the industry there. From January ExecuJet will be offering its first ‘corporate airliner’ for charter.

Aviation Link of Jeddah- Saudi Arabia- is to add two more Airbus ACJs to its managed fleet- making it the largest single operator of Airbus VVIP aircraft in the Middle East. The company already operates nine of these aircraft (four of which are for charter) in its 16-strong fleet. The company started operations 16 years ago and now operates aircraft for owners in Saudi Arabia- Egypt- the UAE and other Middle Eastern countries.

Jet Aviation Abu Dhabi has become the first independent MRO provider to operate out of the exclusive Business Aviation airport at Al Bateen Executive Airport- and will offer line maintenance services backed up from its Dubai hub- just over an hour away by road.

Christof Späth- Jet Aviation’s Senior Vice President- MRO and FBO Services for EMEA and Asia believes- “There has been some decline in traffic [in Saudi Arabia] due to the political environment- but the operation is solid and our new FBO facility in Jeddah has proven its operational ability. We were also asked to bid on the new Riyadh Business Aviation area- which we won- and which should be completed by 2013.”

India
By contrast- Indian Business and General Aviation movements fell to 63-000 in the second quarter of 2011 from 72-000 for the same period in 2010. The Airports Authority of India attribute the disappointing figures to India’s economic downturn. Industry insiders believe that this is too simplistic- however; that bureaucracy and a shortage of infrastructure- as well as worries over world economic meltdown- are not helping India’s ‘overheating’ economy.

The aggregate effect has virtually snuffed out sales of large- long-range corporate jets for the time being. It’s so bad- according to one insider- that “One representative for a large western OEM hasn’t sold a single aircraft to India all year long”.

Unlike other parts of the world- sales of mid-size and light business jets (and turboprops) seem less affected according to Delhi-based Nigel Harwood- Managing Director of newly re-branded THE ESTD (previously InterGlobe General Aviation Ltd). The company is still very much a Hawker Beechcraft sales and service center.

“This year’s sales are slow- but quite good and by the end of September we were exactly where we predicted and on budget-” Harwood revealed. He agrees there is a ‘slow down’ in the Indian economy- but expects this is mostly due to the conservative nature of Indian consumers who closely monitor financial events abroad.

“The slowdown started towards the end of last year (2010) and has carried on. The first three months of the year are generally quiet but pick up by April - that didn’t happen this year-” Harwood concluded.

Both ExecuJet and Hawker Pacific are still very interested in extending their maintenance and FBO services to India and they continue to look for potential joint venture partners. Andrew Hoy of ExecuJet says- “We still have plans for India. We’re watching it very closely and talking with a number of maintenance facilities - and with those come the opportunity of aircraft sales.”

Earlier this year Hong Kong’s Metrojet announced its intention to partner with Taj Air- (part of India’s Tata Group) to offer business jet maintenance and management services at Mumbai.

Southeast Asia
Bombardier forecasts tremendous growth for China and Asia-Pacific at approximately 3-360 business jets over the next 20 years (2-360 China-bound- 1-000 spread across the wider region).

ExecuJet delivered four Gulfstream GIVSPs to Malaysia at the end of 2010 and early 2011. “Malaysia is becoming a very interesting place-” Hoy expressed. “We’re currently working on two or three more solid leads through our Kuala Lumpur office.”

Increased Business Aviation activity from Malaysia is confirmed by Graeme Duckworth Managing Director ExecuJet Asia- who identifies other S.E. Asia hot-spots as Indonesia and the Philippines. “Indonesia being the wealthiest and most populous country in S.E. Asia with around 21 billionaires should attract more business and private aircraft than are currently in the country- so exponential growth can be expected in the near future.

“Likewise- the Philippines - with a few of the wealthy multinational corporations enjoying recession insulated growth - is positioned for further growth-” Duckworth outlined.

Flying Colours of Ontario- Canada and Hong Kong’s Metrojet have signed a Memorandum of Understanding to collaborate on providing interior refurbishment of mid-size to large corporate jets in S.E. Asia. Because of shortage of space at Hong Kong International Airport it is possible the new operation will base either in the Philippines or elsewhere in Southeast Asia.

Finally- U.K.-based Gama Aviation is partnering with Cathay Pacific’s Asia Miles loyalty program in preparation for opening its own Hong Kong office early next year. The new office will link Gama’s other MRO- aircraft charter and management operations in the U.K. the U.S. and Dubai.

As outlined above- you don’t need to dig deep within any of these three sub-regions to see plenty of promise- and potential for growth. In terms of Business Aviation- exciting times certainly lie ahead for the Middle East- India and Southeast Asia.


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