Mideast’s new rich help drive bizav growth in Gulf region
There is a bit of an ironic twist in the continuing fast-pace growth of business aviation in the Middle East. Many new users of business aircraft in this part of the world are part of the wave of economic diversification sweeping the Arabian Gulf states as they try to reduce their dependence on oil income in anticipation of the depletion of reserves. But, at the same time, it is the vast wealth being generated by elevated prices for existing oil output that is funding much of the market growth, which is conservatively estimated at 15 to 20 percent per year.
Not that business aircraft manufacturers and executive charter operators are pondering this conundrum very much. Their biggest challenge is providing sufficient capacity to meet the rising demand–much of it coming from beyond the close confines of the region’s extended royal families as the newly wealthy entrepreneurial class and foreign companies make increasing use of this mode of air transport.
Honeywell Aerospace’s latest annual forecast of the business aviation market–published at September’s National Business Aviation Association Convention in Atlanta, Georgia–predicted that, for the first time, more than 50 percent of demand for new business aircraft will come from outside the core market of North America. The report flagged up the Middle East as being a key facet of this trend, with operators in the region indicating they expect to replace 50.7 percent of their existing fleets over the next five years.
These projections make the Middle East second only to Asia (at 78.7 percent) in terms of market growth expectations and significantly ahead of Europe (47.4 percent), Latin America (38.4 percent) and North America (20.4 percent). In fact, the Honeywell forecast may not tell the full story of the anticipated growth curve in Middle East business aviation because it does not include expected demand from charter operations, which are clearly a key driver of growth.
The gross domestic product of Middle East states is projected to increase at extremely healthy rates of between 5 and 6 percent over the next four years. This is well ahead of the world average GDP growth rate of around 3 percent and is eclipsed only by
the phenomenal expansion of the Chinese economy. What’s more, GDP growth in the Arabian Gulf states is almost certainly higher than the overall average for the wider Middle East.
This prolific growth was very evident at the first Middle East Business Aviation (MEBA) conference and exhibition staged here at Dubai’s Airport Expo Center earlier this year (January 31-February 1). MEBA (Stand W900) is run by Dubai Air Show organizer Fairs & Exhibitions (the company behind the main Dubai Air Show), with the backing of the new Middle East Business Aviation Association (MEBAA).
MEBA 2007 drew 90 exhibitors and 31 aircraft from 20 countries, as well as 2,401 visitors. Almost $1 billion worth of new business was announced during the show, which also featured a full conference program backed by senior local aviation officials, including HH Sheikh Ahmed Bin Saeed Al Maktoum, president of Dubai Department of Civil Aviation.
The conference will now be a biennial event, held in even-numbered years with almost exactly a 12-month gap between it and the Dubai Air Show. MEBA 2008 will be staged here at Dubai Airport Expo Center, November 16 to 18, and AIN will be publishing daily editions on site.
According to Fairs and Exhibitions’ director of aerospace Alison Weller, the increased number of bookings for the 2008 event have led organizers to increase the floor plan and chalet line by 50 percent. MEBA will again feature a static display, with up to 50 aircraft expected to be shown. Participating companies that have recently signed up include Palm Aviation, Jet Aviation, Gulfstream, Hawker Beechcraft and TAG Aeronautics. Air BP has signed up for the first time as a Silver Sponsor. More details about the show are available at www.meba.aero.
Further evidence of a buoyant market for business aircraft is provided by the new Aircraft Interiors Middle East (AIME) show that Fairs & Exhibitions will stage here in Dubai next year, on June 16 and 17. This event will feature executive and VIP cabin interiors, in-flight entertainment and catering displays. More details can be found at www.aime.aero.
MEBAA Membership Nears 60
Meanwhile, the MEBAA business aviation group (Stand W546), which was founded about a year ago, continues to grow and now has almost 60 members.
The organization is based here in Dubai under the leadership of president and CEO Ammar Balkar and chairman Ali Al Naqbi. In June, MEBAA was accepted as a full member of the International Business Aviation Council (IBAC).
The business aviation service sector’s response to the Middle East market’s exceptional growth is especially evident here in the United Arab Emirates. Both Jet Aviation (Stand E546) and ExecuJet Aviation (Stand E542) have made substantial investments in new FBOs at Dubai International Airport. They provide services along with the airport’s Al-Majlis VIP terminal, which is operated by government-owned Executive Flight Services and has reported overall increases in business aircraft movements of up to 30 percent each year.
Next year should see the opening of the Executive Flight Centre at the new Dubai World Center airport–25 miles from downtown, in Jebel Ali. The developers intend to offer a dedicated business aviation gateway to rank alongside international corporate hubs such as Paris Le Bourget Airport, New York’s Teterboro and London-area Farnborough. The facility is being planned to have a capacity to receive as many as 100,000 movements per year and is to feature extensive passenger and crew areas, as well as duty-free stores, a business center, fitness room and food outlets.
The complex, which will offer direct access to a landside heliport to encourage rotorcraft connections to the new airport, is being developed to meet the needs of clients such as guests at the exclusive Burj Al Arab resort and The World residential development (now being built in the Arabian Gulf on man-made islands shaped to represent continents).