Luxury jet-makers woo Mideast ultra-rich with cautious optimism for 2019
After years of sluggish sales, potential buyers in the region are showing interest in new aircraft models
Plane makers unveiling new private aircraft featuring cinemas and Turkish hammams at 40,000 feet are pushing the ultra-luxurious widebody models to attract wealthy Middle East investors, but clinching those deals will hinge on a rebound in oil prices and de-escalation in political tensions.
After years of sluggish sales, potential buyers in the region are showing interest in new aircraft models with bigger cabins, longer range and smooth ride technology and plane makers are cautiously optimistic about growth prospects in 2019, according to regional heads of executive jet divisions.
“It all comes down to the economic factors in the region: oil, consumer goods, tourism, financial backing and the property market,” Stephen Friedrich, chief commercial officer of Embraer Executive Jets, said in an interview in Dubai.
The Middle East is a critical region for global plane makers, representing the biggest executive jet market for Boeing and Airbus. However, according to Honeywell's Aerospace Forecast, appetite for private jets in the region is weakening. The Middle East and Africa will account for just four per cent of plans to purchase over the next five years compared to 61 per cent of intended buyers from North America, according to the report released in October 2018.
Globally, the 10-year outlook is for up to 7,700 new business jet deliveries worth $251 billion from 2019 to 2028, up one to two percentage points from the 10-year forecast in 2017, according to Honeywell. It expects a rise in jet deliveries in 2019 compared to a flat 2018, boosted by new models entering service such as Bombardier’s Global 7500 in a fiercely competitive market.
Dubai, which is working to grow its executive jet business through dedicated VIP terminals and aircraft services, expects a 10 per cent increase in flight movements in 2018 from 14,700 movements in 2017, Tahnoon Saif, vice-president of aviation at Dubai South, said in an interview with The National.
Dubai South expects to reach 19,000 VIP flight movements by 2020 as it builds an eco-system for private jets including hangars and maintenance facilities, he said.
Plane makers are intensifying efforts to woo the ultra-rich in the Middle East, from heads of state to corporate travellers, with larger new models offering hotel-like amenities and swanky interiors featuring gyms and games area. The region is home to the world’s largest fleet of commercial widebody jets.
Canadian plane maker Bombardier expects to see a rise in private jet sales in the Middle East in early 2019 on hopes that oil prices will rebound and more clarity emerges on global economy issues, including Brexit and US-China trade tensions.
The company is "very optimistic" about business in 2019 in the regional market, where it has received "great" feedback about its new Global 7500 business jet, Khader Mattar, Bombardier's vice president of sales for the Middle East and Asia-Pacific, told The National.
"With oil prices going up this year, I'd imagine by the first or second quarter we'll see a turnaround and more activity in this market," Mr Mattar said.
Toulouse, France-based Airbus is “positive” about its outlook for demand in the Middle East, where it is in talks with governments and private customers for potential orders of its ACJ350 widebody business jets, Benoit Defforge, president of Airbus Corporate Jets, told The National.
Brazilian jet-maker Embraer is bullish about prospects for its new super-midsized Praetor 600 business jet in the region, where it has secured a sale for the jet and is in talks with more customers, Stephen Friedrich, chief commercial officer of Embraer Executive Jets, told The National. Embraer plans to embark on a demo tour across the Middle East spanning the UAE to Turkey next year to promote its products.
Updated: December 31, 2018 05:51 PM