Middle East Is Top Sales Venue For Large-Cabin Jets
The Middle East remains the sales sweet-spot when it comes to regions that business jet manufacturers look to for customers despite its relatively small size and the rapid emergence of China, Brazil and other countries where momentum is building. This is true in particular of large cabin jets and corporate versions of airliners. AIN spoke to some of the leading original equipment manufacturers (OEMs) to assess their status in the region. (For a look at Boeing Business Jets’ profile in the region, please see separate story):
Airbus Corporate Jets
The region has long been an integral part of the Airbus Corporate Jets (ACJ) global sales effort, with several government and commercial private jet entities well established as customers. At the 2007 Dubai Air Show, Airbus announced that Prince Al Waleed bin Talal of Saudi Arabia would become the owner of the world’s first private A380. Kuwait’s Al Kharafi Group took delivery of the first ACJ319 in 1999, and the state of Qatar received the first ACJ320 Prestige a year later. Comlux, another player with strong ties to the region, took delivery of the first ACJ318 in 2007.
The OEM claims global sales of 170 aircraft: 110 of the ACJ320 family and 60 government and VIP widebody models. In the Middle East, ACJ owners also include Saudi Arabia’s National Air Services, Saad Group and Mid East Jet, Qatar Airways and the Qatari Amiri Flight, while Al Jaber Aviation and Comlux also have aircraft on charter in the region, the company said. In addition to Qatar, Oman is also a government ACJ player.
ACJ made its first sale, an A300, to a UAE customer in the 1980s. “That gives an indication of how important the Middle East has been historically as a corporate jet market,” said David Velupillai, ACJ’s marketing director. Customers are evenly split between companies, high-net-worth individuals and governments. “The Middle East is Airbus’s largest market for corporate jets,” he added. “The market for the widebody Airbus is the largest for all of the corporate jets we make.”
The creation of a distinct corporate jets business unit, announced at last year’s Dubai Air Show, has led the company to place increased emphasis on aircraft displayed at airshows. “In the corporate jet business, the key factor in selling the aircraft is the cabin,” said Velupillai, stressing the advantages of space. “That’s different from the airline side, where the [main concern] is economics.”
In May, Airbus Corporate Jets announced that its ACJ318 and ACJ319 had gained EASA and FAA approval for Part 135 operations. Importantly, Saudi Arabia’s regulator, the General Authority of Civil Aviation (GACA), was also included in the list of bodies granting approval, as was China’s CAAC. Previously, jets such as these had to obtain Part 121 approval, entailing the same kind of checks that commercial airlines undergo. Federal Airworthiness Regulation Part 135 requirements recognize that business operators carry fewer passengers, fly less frequently and face a less demanding environment than airline operators.
Bombardier expects its product range to attract new interest here at MEBA 2012. “We’ve been active in the Middle East since the introduction of the Challenger 600, our first business jet, and over the years we’ve seen demand steadily grow and the market develop,” said Khader Mattar, regional vice president, Bombardier Business Aircraft, Middle East, Africa and India.
“The Middle East is a developed market that has traditionally favored large-cabin jets…and Bombardier is the market leader, with approximately 25 percent market share,” Mattar added. “Our Challenger jets have been great sellers here and we [now] have a 64-percent market share in their segments. However, with global expansion the market is growing and there is demand for all of our jets.”
The company’s Learjet family features the 40XR, 45XR, 60XR and the in-development Learjet 85. Additionally, Bombardier is developing the Learjet 70 and 75 as successors to the Learjet 40XR and 45XR. In the Challenger segment, it has the Model 300, 605 and 850, while its Global family features the 5000 and 6000 jets, and the in-development 7000 and 8000, in which Qatar Executive is believed to have expressed an interest.
The Bombardier Business Aircraft Market Forecast expects industry deliveries of 1,185 new business jets for the Middle East over the next 20 years. “For the ten years between 2012 and 2021 we expect that the market will take delivery of 410 jets and for the following ten years, 2022 to 2031, a further 775 aircraft will be delivered,” Mattar said. “More importantly, the vast majority of these deliveries are expected to be new additions to the fleet.
“Typically, people in the region will fly with an entourage, which is just one of the reasons why our Global jets are so popular here. Our Global 6000 features the largest cabin of any purpose-built business jet, and with its 6,000-nautical-mile-range, it can fly eight passengers and three-to-four crew from Dubai to Perth nonstop,” he said.
The Global 7000, with its four-zone cabin, will offer at least 20 percent more space than the Global 6000. The Global 8000 offers a range of 7,900 nm, which Bombardier claims is unmatched by rivals. “Our in-development Global 7000 and Global 8000 jets are already generating interest in the MENA region as we work to redefine the large-cabin and long-range segments,” Mattar told AIN.
Embraer Executive Jets
Embraer Executive Jets (EEJ) has won over the Middle East region in both commercial and business jets, with around 100 deliveries to date, split roughly 55 to 45 percent between the two segments. Despite slightly fewer sales, business jets have enjoyed real success. “Our products are found in all locations in the Middle East, including Oman, Saudi Arabia, the UAE, Lebanon, Kuwait and Bahrain,” said Colin Steven, EEJ’s vice president, EMEA. “It’s our second-biggest market.”
EEJ said at least 46 executive jets are operating in the region: five Phenom 300s, more than 30 Legacy 600s and five 650s, and six Lineage 1000s. “The Lineage 1000 is the leader of our seven-model fleet; the biggest number of Lineages worldwide is found in the Middle East,” said Steven. “The first Legacy in the region went to Saudi Arabia in 2004 and, shortly afterward, the Saudi Arabian Airlines acquisition of the [commercial] ERJ-170 took place, and the rest [of the region’s airlines] followed suit.”
Abu Dhabi’s Falcon Aviation Services operates a Lineage 1000 and two Legacy 600s on corporate charter. Al Jaber Aviation operates a Legacy 600 and a Lineage 1000. In Dubai, Empire Aviation manages and operates a fleet of six Legacies. In addition to pure-play business jets, Saudi Aramco’s three ERJ-170s, the Royal Omani Police’s ERJ-175, and Petro Air’s three ERJ-170s are also regarded as part of Embraer’s executive jet fleet in the region.
Embraer held its Middle East Executive Operators Conference in Abu Dhabi in October to give technical, maintenance and flight operations updates and familiarize operational and service teams on new MRO centers in the region, and improved spare-part provisions and logistics turnaround times. In addition to an extensive network of owned and authorized service centers in Europe, Falcon Aviation Services in Abu Dhabi and ExecuJet Aviation Group in Dubai offer authorized MRO facilities.
Falcon offers line maintenance on the Legacy 600 and 650 and the Lineage 1000, while ExecuJet provides line maintenance on the Phenom 300 line, and base maintenance for the Legacy 600 and 650. Lanseria Jet Centre in Johannesburg, South Africa, also offers base maintenance for the Phenom 100 and 300, and line maintenance for the Legacy 600 and 650. EEJ’s EMEA office is located in London, with regional directors located in Russia, the UAE, South Africa, France and the UK.
The Legacy 600 and 650 have benefited from their ability to perform in the intense, 45-degree C summer heat of the Middle East. “[The Legacy’s] hot-and-high performance makes it an ideal airplane to operate in the Middle East, and it is far less restricted [than its competitors] in hotter conditions,” said Steven. At MEBA 2012, several Embraer business jets owned by various operators are on display, including the Phenom 300, Legacy 650 and Lineage 1000.
A unique brand of Gallic flair and a military- and private-jet manufacturing model that cannot be found anywhere else in the world has combined to make French company Dassault Aviation popular with Middle East buyers. “You can imagine the impact of the relations we have with our customers, which is very close and personal,” Renaud Cloatre, Dassault Aviation’s international sales director, who is based here in Dubai, told AIN. “People in the Middle East want to have a business jet on which they can rely and which offers them a very safe flight. We have a very good image in terms of safety,” he added.
Cloatre said Dassault has a global backlog of more than 110 aircraft, with some 65 aircraft to be delivered for 2012. Middle East companies now operate more than 60 Falcon business jets and will take delivery of around 12 new aircraft over the next 18 months. Saudia Private Aviation became the largest owner of the Falcon 7X worldwide with its fourth delivery last March. “We see strong demand from new customers in the Gulf Cooperation Council and other Middle East regions,” said Cloatre. “There was a drop in demand last year, but it is back this year.”
Since rollout of the first Falcon 20 in 1963, more than 2,100 Falcon jets have been delivered to 67 countries worldwide, according to the company. The family of Falcon jets now in production includes the trijets–Falcon 900LX and 7X–as well as the twin-engine 2000LX, 2000LXS and Falcon 2000S. Dassault launched the six-passenger Falcon 2000LXS in October, designed to replace the 2000LX in 2014. It climbs to 41,000 feet in only 19 minutes, but requires runway length of only 2,260 feet.
However, the company’s trijets are a regional favorite. The three-engine aircraft give executive travelers additional options: “Business flyers don’t have to divert [in the event of a one-engine malfunction] but can continue their flight as planned,” said Cloatre. With a range of 5,950 nm, typical Falcon 7X city pairs include Dubai-Perth, Dubai-Tokyo and New York-Dubai.
In addition to its line of Falcon jets, Dassault Aviation produces the Rafale fighter. “Dassault is the only manufacturer on Earth making private jets as well as combat aircraft. In terms of basic operational weight, we save 20 to 30 percent on our competitors,” said Cloatre. With its steady pipeline of deliveries in the region, the need to train pilots to fly the aircraft is assuming increased importance. “CAE training is seeing very good activity [in Dubai] with all the Falcons that are in production,” Cloatre added.
He cites the MEBA 2012 event as proof that the Middle East region is no longer “emerging.” “It is now a ‘mature’ market,” he said. “The event is essential for us. Ali Al Naqbi is doing a tremendous job. Regional associations are essential for lobbying. Business aviation has to defend itself in airspace that is crowded. We need this kind of show as a rendezvous for professionals, the owners and clients, and customers. For me, it really compares to EBACE. It is a key element for aviation in the region.”
Scott Plumb, vice president of sales EMEA, told AIN, “As one of the key events in the business aviation calendar, MEBA is a great opportunity for HBC to showcase our products, such as the King Air family, to prospective customers in the Middle East, as well as building the overall reputation of the brand. We are also looking forward to the event to catch up with our clients and discuss the aviation issues affecting the region.”
Plumb added that the company is “currently the leading manufacturer in the Middle East, holding 25 percent market share in the segments in which we complete [71 percent in business turboprop aircraft and 16 percent in business jets].” This, he added, is based on October 2010 analysis of data from JetNet.
The company has been developing its support network, too. “As a sign of our commitment to the Middle East, we recently strengthened our customer support network there by partnering with ExecuJet, and have added an additional $10 million worth of parts warehoused in Dubai, London and Singapore. We also have an alliance with Arabasco in Saudi Arabia,” Plumb continued.
In terms of the overall market in the region, he said, “[We believe] that the long-term growth prospects for business aviation in the Middle East are strong. This is being fueled by a combination of a heightened focus on privacy and security, strong economic development in the Middle East, greater diversification of the region’s wealth around the world and the need for new governments in the area to increase their international exposure.
“There is also growing interest in the region for other applications of business aircraft, such as medical evacuation and aerial surveillance,” he said.
Plumb concluded that, “We believe that business aviation is growing in the Middle East as a result of an influx of companies that offer corporate jet services to their senior executives, and a growing number of secondary airports in less populated areas in the region, making travel to remote areas easier–a benefit especially valued by oil and gas companies.”