This optimistic forecast comes despite jet order cancellations by regional chartered-flight operators.
Big air deals expected
DUBAI // The Middle East Business Aviation Association (MEBAA) believes deals at next week's business-jet air show in Dubai will top last year's total sales of US$907 million (Dh3.33 billion). This optimistic forecast comes despite jet order cancellations by regional chartered-flight operators and difficulties in raising finance for aircraft. With this year's show three times the size of last year's debut event, business-jet makers are seeking lucrative deals in the region to compensate for declining sales in Europe and North America.
MEBAA estimates 5,000 people will attend the three-day business-to-business exhibition, and predicts the regional business aviation sector will grow 15 per cent annually for the next five years. "The financial crisis has not directly affected the business-jet market. The orders were placed years ago," said Ali Ahmed al Naqbi, the founding chairman of MEBAA. "We expect to see new aircraft orders placed during the show. There will be more regional buyers."
However, Amar Balker, the chief executive of MEBAA, admitted that there had been some cancellations by the chartered-flight operators on previous orders, and that regional banks were finding it difficult to finance the purchase of aircraft. "We have learned from the operators and manufacturers about some cancellations," he said. However, he did not say how many orders were placed during the past year, nor did he reveal the scale of cancellations.
"We don't have full figures yet. We will have them when we meet the operators and manufacturers at the show," he said. According to Mr Balker, there were few regional banks financing the purchase of business jets. Most of the funds were raised from European and North African financial institutions. Mr Naqbi said: "There were some casualties in the business due to funding problems and high oil prices, but many more new names have entered the market. A lot of airlines are also starting their own chartered services, so growth of the business-jet sector is not in question."
According to MEBAA data there would be 14,000 new business jets delivered between this year and 2018 at a combined value of $3bn. Last year was the first time that 50 per cent of the aircraft sales had taken place outside the US. A major portion of those were in the Middle Eastern and North African markets. "The chartered-flight sector has grown rapidly here. There was one operator in the region between 1975 and 1998, and now we have 22 operators," Mr Naqbi said.
There are 500 business jets operating in the region, of which 50 per cent are operated from Saudi Arabia and the UAE. "We expect this number to double within the next six years, but it will all depend on the availability of finance and the economic situation," he said. The air show will involve 250 exhibitors from 29 countries. It will have 79 aircraft on display, ranging from the very light jets used for air taxis to long-haul corporate aircraft.