Private jet business up on Mideast unrest
Dubai, March 31, 2011
Private jets, once playthings of the rich, are seeing a spike in business, having become a necessity for travellers in the restive Mena region where commercial airlines have scaled back flights.
Banned by many firms as an extravagance after the global downturn, jets -- some with gold-plated interiors, bedrooms and bathrooms -- are vital for businessmen, diplomats, politicians and families wanting quick, discrete exits from trouble spots.
Airspace over the world's No. 1 oil exporting region is buzzing, with passengers doling out as much as $18,000 for an hour-long flight on an 18-seater, after protests toppled rulers in Tunisia and Egypt this year and the unrest spread to Gulf states including Bahrain, Yemen, Kuwait and Saudi Arabia.
'During the peak of the Egypt unrest, we were flooded with calls,' said Shane O'Hare, president and chief executive of Royal Jet, based in Abu Dhabi.
'We had corporate customers, individuals, families, diplomats and others calling for our service,' he said.
The company got about 20 calls a day, with up to seven trips every couple of days compared to just two flights normally in the same period in the last two years.
'People were desperate to leave,' Paras Dhamecha, executive director of Dubai-based operator Empire Aviation Group, said of Egypt where his firm ran six to seven flights a week transporting groups and large families.
'The crisis is very unfortunate, but it has boosted business for us,' said Mark J. Pierotti, chief operating officer of Al Jaber Aviation, an Abu Dhabi-based premium charter and business jets service. 'We are not back to the levels we saw in 2007, but it seems like we can get there soon.'
The business jet market fell hard in 2009 after five consecutive years of growth as companies cut spending and tighter credit made purchases difficult, but business is up by at least 15 per cent since December and the company is inundated with rescue calls, Pierotti said.
'There have been repeated demands for the best business jets. The Airbus A318 is very popular and so are the Embraer Lineage,' he said. 'We have seen very difficult times in 2008 and 2009 when the recession peaked. But now, we are back. We see hope.'
Gulf havens, discretion
The Gulf's proximity to North Africa, where much of the fighting has been centered, has made havens of Qatar, the United Arab Emirates and Saudi Arabia. Seventy per cent of business jets in the region are owned by Saudi and UAE-based companies.
Companies desperate to pull their staff out of Libya have also inundated private jet firms with calls as U.N.-sanctioned air strikes hit the North African state and rebels engage in a fierce war with supporters of leader Muammar Gaddafi.
'Security was a major concern in Libya. The airspace was actually closed when the unrest intensified,' said Royal Jet's O'Hare. 'We operated aircrafts to Malta and made arrangements for our clients to reach (there) from Libya.'
He declined to specify those arrangements.
Al Jaber's Pierotti said the operator had at least three flights going to Tunisia each week during its crisis and about two flights a day to Cairo. The massive earthquake and tsunami in Japan brought yet more passengers, as Arab businessmen and diplomats stuck in Japan called on operators to get them home.
The need is not just for speed but also for privacy, in some cases, as politicians, diplomats and other public figures opt to evade the media glare during a political crisis or hold private discussions, something more difficult to do on commercial flights. Business jets also offer a certain discretion -- reports of Egyptian, Tunisian and Libyan politicians fleeing on private jets have been widely reported during the current unrest.
'They (private jets) are a means of travelling under the radar,' said Sudeep Ghai, partner at London-based airline and airport consulting firm Athena Aviation.
Ghai forecast the corporate jet industry will grow 8-10 per cent this year, with more than 200 jets expected to be delivered in the Gulf region by 2015.
'It is a discrete but highly relevant need in the current environment,' he said. 'In times of perceived crisis, business aviation often reacts in a way that is opposite to commercial aviation.”
'Regular passengers whose travel needs are non-essential will stay at home. But, as available frequencies are cancelled, journeys to the airport become more complicated and security concerns rise, the time-poor, must-travel segment will usually find a way to fly and business jets provide the convenience of taking you where you need to go, on demand,” Ghai concluded. – Reuters