Mideast defies credit squeeze with oil-fueled fleet growth
While the global economy is reeling in the wake of the credit crisis, the Middle East is largely insulated from these problems, which bodes well for companies hoping to sell business jets in the region. In fact, the estimates of $1 billion in annual business jet sales in the Middle East “is rather conservative,” Jahid Fazal-Karim, the co-owner of Jetcraft Corp. and the former Bombardier Aerospace senior vice president for worldwide business jet sales, told MEBA Convention News.
Qatar, Saudi Arabia and Abu Dhabi are essentially impervious to the credit crisis, Fazal-Karim said, while Dubai is somewhat exposed because it relies on foreign investment as it moves its economy from one based on oil to one underpinned by
financial businesses and tourism. However, he added, the global crunch will have a much milder effect on Dubai. Meanwhile, Fazal-Karim said Middle Eastern countries with oil-dependent economies are “still making money, even at $60 dollars per barrel” since they are pumping easy-to-obtain oil, which costs less to produce than oil obtained through other methods, such as offshore drilling.
And as the economies grow in the Middle East, so do business prospects. Fazal-Karim pointed out that these opportunities have created “secondary wealth” in the region, which has resulted in “a much more diverse customer base” over the past few years. So gone are the days when business jet sales to Middle East customers relied extensively on royal families opening up their checkbooks. “However, this top end is still there–royal families are still buying bizliners,” he said.
While they’re not necessarily looking to buy bizliners like the royals, wealthy entrepreneurs in the region aren’t searching for entry-level and light jets either. Instead, they’re seeking to acquire midsize and large-cabin business jets that can fly nonstop from the Middle East to Europe, Fazal-Karim said. “The Challengers are very popular here,” he said, “in addition to the Cessna Citation XLS and Sovereign.
Bombardier and Cessna have done very well in the Middle East.” Fazal-Karim believes that Bombardier’s Learjet 85 and Cessna’s Citation Columbus–both of which are in development–will equally do well in the region.
He predicted that a supersonic business jet would be something that Middle Eastern customers “would have to have.” With such an aircraft, business jet users could cut in half their travel times from Dubai to London, Fazal-Karim noted. “The next big thing is a supersonic aircraft. After all, time is money and aircraft are productivity tools” that allow users to make better use of their time.