Some of the UAE's oldest family-owned businesses invested more than US$1 billion in new aircraft.
Private jet operators fly through crisis
Private jet operators are taking a bullish outlook on the future of luxury travel despite gloomy financial conditions, investing in new hubs throughout the Gulf and scouring for cheap assets in the US and Europe. On the first day of the Middle East Business Aviation (MEBA) exhibition in Dubai, the third-largest private jet presentation in the world, some of the UAE's oldest and most recognisable family-owned businesses invested more than US$1 billion (Dh3.67bn). Yet among the rows of multimillion-dollar aircraft on display yesterday were warnings that regional business jet travel will not be spared by the global economic turmoil - and evidence of this would come soon. "It will slow down for sure, but we are not seeing the level of slowdown in other regions up to this point," said Habib Fekih, the president of Airbus Middle East. "Things will be more visible next January." With the global aviation industry reeling from slowing growth and tight credit, some Gulf companies are in foreign acquisition mode, lured by the prospect of bargain prices. Emirates Investment and Development Company, a private shareholding firm set up in 1997, last month bought Sino Swearingen Aircraft Company, a Texas-based jet maker. Prestige Jet, which launched its executive air service out of Abu Dhabi in May last year, announced it had purchased Flylink Express, a Spanish charter operator. The company, to be renamed Prestige Jet Spain, gives Prestige Jet its first European foothold. Also expanding into Europe is Rizon Jet, a private charter firm based in Bahrain. The company said it had secured an 80-year lease to operate out of London's Biggin Hill Airport and would spend $35 million on building a jet hangar facility and 75-room hotel nearby. Many investments in the UAE are focused on Abu Dhabi, where the airport management company is converting a military airbase into an exclusive centre for executive jets called City Airport, Abu Dhabi. Abu Dhabi Airports Company (ADAC) is investing Dh200m to provide more aircraft parking stands, a new landing system and GPS technology system. It may even build a hotel at the airport, 5km from the business district. Al Jaber Group, with 55,000 employees, is one of the largest family-owned businesses in the UAE. The holding company, with interests in construction, shipping and hotels, has revealed that its new charter company, Al Jaber Aviation, is scheduled to open at City Airport in February. Yesterday, it unveiled investments worth $1.2bn for 21 corporate jets from Airbus and Embraer, a maker of smaller jets seating between 10 and 100 passengers. Prestige Jet said it would expand and set up a holding company to run six private aviation companies. Aside from its charter service, it will form an investment company, a flight ambulance service, an air charter brokerage firm, a flight support unit and a maintenance company. Al Futtaim Group also said it hoped to launch a private jet firm next year in the Emirates and would partner with DC Aviation, an operator based in Germany. There were also signs of investment into Saudi Arabia, the biggest private jet market in the Gulf. MAZ Aviation, which placed a $1bn order this year for six A350 private jets, said it would spend $70m on a VIP facility at Riyadh's airport. It is also establishing a holding company and new companies focused on fleet management, logistics and aircraft maintenance. Similarly, Empire Aviation, based in Dubai, revealed plans to build a second private jet hub in Riyadh with a local partner. The hub is scheduled to open in the middle of next year. Charter flights at Abu Dhabi airport have risen an average of 46 per cent a year since 2004, according to the ADAC. Although the regional fleet of private aircraft totalled 388 today, by 2014 there could be up to 900 corporate jets in the region, the company said. But yesterday, industry professionals said a slowdown had either arrived in the Gulf or would do so soon. Some companies in the UAE had already cancelled business jet flights for their executives, said Ali al Naqbi, the chairman of the Middle East Business Aviation Association. Al Jaber Aviation said it had ditched plans to buy the twin-level Airbus A380 superjumbo for charter flights, and would focus on smaller craft. "Many corporates are rethinking their expenditure in a number of different areas," said Shane O'Hare, the president and chief executive of Royal Jet. He called private jets similar to "any cyclical market, where overheating is then followed by a period of correction". firstname.lastname@example.org