Dubai remains a strategic node in the business aviation industry due to demographics and its attractiveness as a location for high-net-worth and ultra-high-net-worth individuals, according to Holger Ostheimer, managing director of FBO operator DC Aviation Al Futtaim (Booth Y134).

“Business aviation will always be a focus for Dubai. We have benefitted from the influx of activity coming from DXB [Dubai International Airport]. Looking at Dubai as a market subdivided between DXB and DWC [Dubai World Central Airport], the question is: has there been growth?”

Business aviation traffic is encouraged to move to DWC, the newer airport to the south of the city. Airline traffic crowds the older, closer airport, so business aviation slots have been tough to come by. But passengers—and operators—have to be convinced to shift their focus to the airport sometimes know as "Dubai South," based on travel time to the city.

Speaking to AIN, Ostheimer said he did not have access to official data on the migration from DXB to DWC. “According to the research we undertake ourselves, we would estimate that 60 percent of movements have moved to DWC, while 40 percent remain at DXB. We estimate that by the end of next year, the share will diminish to 10 percent at DXB.”

Ostheimer is clear about the effects of weak growth on current market dynamics. “Some players are very willing to make significant concessions in putting a price tag on their services. That is something we have to accept. We want to provide continuous quality so that clients make a decision for us at a price that is in line with common market limits [and also] in line with market dynamics,” he said.

DCAF received boosts to its credibility at DWC’s premier FBO with the recent arrivals of the Four Seasons Boeing 757 cruise-liner and the privately configured Deer Jet 787 business jet. The latter's Chinese operator choose DCAF it in preference to the new DWC VIP Terminal, which plays host to Jetex Flight Support and Falcon Aviation. Several flight support companies also use its facilities, including Hadid and UAS.

“I have always said I do not believe in exorbitant growth. I believe in moderate growth. Looking at our part of the industry, I have had no indication of a decline, but equally, I do not see significant growth.”

DCAF is building a second hangar at its DWC facility. “The design has changed slightly due to fire codes. December 3 is the target date [for completion] at the moment. I am pushing to have the facility in position by Dubai Airshow on November 12,” he said.

“With the construction of the second hangar, we are a serious contributor to the DWC project as a whole. It is a serious commitment. We have reinforced our commitment [to DWC] by adding this additional facility. We are taking advantage of the lack of capacity at Dubai South at the moment. We are starting our second hangar project before anyone else was in a position to start their first hangar infrastructure,” Ostheimer added.

More Maintenance

DCAF is also expanding its MRO footprint. “The partnership with Lufthansa Technik is going to fuel progress in providing long-term maintenance activities. The rear of the current hangar will provide this, while the front will be available for ad hoc parking and maintenance, driven by an increase in aircraft management opportunities,” said Ostheimer.

“We have a number of joint maintenance events. I would like to see this increase in time. When the new hangar opens in 2018, reliable additional handling capacity will be available.”

DCAF’s managed fleet recently saw the addition of a new aircraft, a Global 5000 from the U.S. With one more business jet to join in the course of the year, this will mean a total of six aircraft in the fleet. “Paul van der Blom, our head of commercial operations, has a number of hot leads that we would like to see materialize by the end of the year,” Ostheimer said.

DCAF’s exposure to the third-party charter market is limited. “Given the capacity in the market, the prices and policies of some of the operators in the market are not aligned to commercial thinking, especially [given] aircraft operating cost. There may be other motives driving people to operate increasingly large aircraft fleets. Charter revenue cannot be the major driving force,” he said.

Ostheimer is calling on the Dubai and Gulf-area market not to cut corners. “It is a call to all the recognized entities in the market, whether financiers, legal advisers or aircraft owner representatives: everybody is responsible for promoting serious players in the market that are advocating high levels of operating standards.

“We would like to see the upside, for us and other competitors, who operate at the same level. That would mean the client being advised to take sound decisions, not for the cheapest service provider, but for a service provider that is competitive in pricing and able to guarantee the highest level of flight safety and airworthiness of the aircraft,” he said.

Ostheimer said DCAF is on course to achieve its goals for 2017. “We have set activity targets, and we are meeting those targets. The market is a little bit diluted because of the move from DXB to DWC. For us, the most difficult thing is to differentiate between vertical business coming in from outside the region and horizontal business coming from DXB.”