Demand for business aircraft in the Middle East is picking up, according to finance specialist Global Jet Capital. The U.S.-based group sees rising interest in leasing, as private aviation consumers adopt an increasingly pragmatic approach to meeting their transportation needs.

“There is no question that we saw the [Middle East] market get impacted by a sharp drop in oil prices over the past couple of years, but in recent months we have seen life in it again,” Simon Davies, Global Jet Capital’s sales director for Canada, Europe, Africa, the Middle East and India, told AIN. “Inquiries have picked up a lot in the last few months. A lot of it involves replacing existing aircraft, with buyers going for slightly larger aircraft.”

Global Jet Capital isn’t seeing much evidence of new aircraft owners entering the market in this part of the world. “It is still mainly traditional [i.e. existing] aircraft owners, and there still has not been much transition from charter customers deciding to buy,” Davies said. “A lot of people have been sitting out the paradigm shift for [falling] aircraft residual values after 2009. People who bought in 2007 and 2008 have hoped for a rebound, but now they see the market as having reached a new norm. So we’re seeing people return to historic buying patterns now that they’ve adjusted to the new market conditions.”

More Leases

The two-year-old group, which earlier this year completed the acquisition of GE Capital’s corporate aircraft lease and loan portfolio, says that other finance providers have been backing away from the business aviation market. “It’s increasingly rare to find leasing available,” said Robert Gates, managing director and head of sales for EMEA and APAC. “We’re the only meaningful supplier of that to the whole world.”

According to Gates there is now more interest in the company’s operating leases. “It’s a more sophisticated form of financing. It’s a vibrant part of the U.S. market and is already starting to penetrate Europe, Asia and the Middle East. It is healthy for both consumers and manufacturing because there needs to be something other than just chartering, paying cash or getting a bank loan.”

Generally, the Global Jet Capital team has seen a more pragmatic approach to how customers secure access to private aviation. “In this [Middle East] region there has certainly been a change in attitude,” said Davies. “It used to be seen as the market of a poor man to have to borrow money. But many younger people here have been educated in Europe or the U.S. have more of an understanding of leveraging assets and freeing up capital for other businesses.”

“I’m rather bullish on the Middle East for next year,” he concluded. “It’s not as booming as it was in the mid 2000s, but there is significantly more confidence now that oil prices are stabilizing.”

Global Jet Capital is backed by a trio of investment firms including GSDO Capital Partners, The Carlyle Group, and AE Industrial Partners. It currently has $2.5 billion in assets under management, with committed lending capacity of an additional $1 billion.