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Industry Issues

To Gulf Business – Aviation Special Supplement in November 2013

12 December 2012

The Middle East's business aviation market is growing at a phenomenal pace. What is spurring this boom?


Across the region, traffic and flying hours are up over 12% from last year and the association predicts that registered aircraft will increase from 500 to 1375 in the next seven years. That’s more than 100% increase and is in line with industry predictions for regional business aviation to be worth $1.3 billion by 2020. Spurring this is the infrastructure now in place and supporting its geographical advantage for corporations wanting access to Asia, Sub-Indian continent and Africa. Operators, brokers, manufacturers, MROs, FBOs, regulators, distributors, lawyers, insurers, re-insurers, pilots, safety inspectors – they all have operations in the Middle East now providing end-users with the right support structure.


The booming sector is also rapidly welcoming new players. Is increased competition good for the industry?


Naturally competition is good for any industry but providing it comes with best practice and high standards. In business aviation there are operators that work outside the industry in so much that they are conducting flights illegally – otherwise known as operating in the grey market. The solution towards the grey market is still open for debate, such is the size of the problem, but I believe that if regulations better understood the dynamics of business aviation, travel would become seamless, adhering to insurance would be cheaper and profits would be greater. Then private managers and owners might not feel the need to lease planes or operate within the grey market and instead chose to work with respected companies, regardless of how long they have been in the Middle East.


Will having a new business aviation hub in Dubai's DWC provide further impetus to growth?


When the Middle East Business Aviation Association (MEBAA) was founded in June 2006 we hoped to have an airport that would be so committed to creating a viable cluster for the business aviation industry and encouraging the development of FBO’s, MRO’s, manufacturers, education institutions and other aviation-related businesses necessary to meet the growing demands of business aviation in the region. DWC is now this airport with everything we hoped for. 


One of the major challenges for our industry and the Middle East Business Aviation Association has been airport access and its integration across the supply chain. Globally this is an even greater problem because airports have an increased emphasis on carrier movements, while other users such as business aviation, whose contribution to aeronautical revenue is incorrectly regarded as minor, are treated as secondary. This results in capacity restraints, peak charges, schedule coordination and limitation on FBO facilities.


By understanding the importance of business aviation and such issues, DWC has set the example to the rest of the world on how an airport should allocate a significant part of its infrastructure to serve the general and business aviation industry. 


Lastly, where do you see the industry heading in the near future? 


Competition among aircraft management companies for new aircraft joining Middle Eastern registries is definitely fierce, but charter demand is solid, especially for large-cabin and airliner-size jets. Traffic and flying hours are up and the established operators are coping with a strong thoroughfare of traffic. A lag in maintenance and hangar capacity means infrastructure is continuing to expand, and executive versions of Airbus and Boeing wide bodies are still popular with Middle Eastern ruling families.


 


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