A decade ago, business jet use was constrained mostly to North America. Now, with the development of fractional ownership packages, lighter, cheaper aircraft and the expanding global economy, corporations operating in other parts of the world increasingly are seeking out business jet services. Demand for business jets is growing fastest in the Middle East, due to a number of factors including infrastructure development, security concerns, rising economic power and a burgeoning number of regional suppliers.
Honeywell Aerospace last month revised its forecast for business aircraft sales to 14,000 deliveries through 2017, an additional 2,000 projected orders from earlier forecasts, and said new orders in the first half of 2007 were up 100 percent over the first half of 2006. Though U.S. orders accounted for 80 percent of sales 10 years ago, half of the deliveries today are to buyers in other countries, according to Honeywell. Demand in Asia, Africa and the Middle East is growing the fastest, with five years of consecutive growth rates of 50 percent, the company said.
A Boeing Business Jets spokesperson said the company in 2007 will have a second consecutive record-breaking year in sales, with 30 business jet orders totaling $2.9 billion. Twenty-nine percent of the company's BBJ sales come from buyers in the Middle East.
The business aviation market in the Middle East is expected double in worth by 2012 to reach $800 million, and its share of the overall aviation market in the region is expected to double to 40 percent, said Ammar Balkar, president and CEO of the Middle East Business Aviation Association. Currently, there are 22 private jet operators in the region.
Balkar cited a number of reasons for the growing popularity of business jets among corporations in the Middle East, including a growing regional economy, bigger corporate budgets and the availability of more types of cheaper aircraft. These smaller jets allow a greater variety of pricing options for charter and fractional ownership.
Another reason for the growing demand is the development of airports in the Middle East, Balkar said. More than $40 billion in projects to develop facilities in the region are underway, including the expansion of the Dubai International Airport and the new Doha International Airport.
Another factor is security. Balkar told AME Infothat business jet demand since 11 Sept. jumped 40 percent--largely due to safety concerns--and that some companies now require their top executives to use private aircraft rather than commercial service.
Honeywell attributed the growing demand for business jets in Asia, Africa and the Middle East to oil revenues, and Balkar said many Middle Eastern companies now have the resources to purchase their own aircraft. Jets then can then be customized for clients by aircraft suppliers like Boeing.
Of course, business jets go over well with executives who value privacy and confidentiality, as well as comfort and convenience. Siemens uses charter services when it requires business jets in the Middle East, according to Disha Lakhiani, the German electronics and engineering firm's commodity buyer for regional operations. In an email to The Transnational, Lakhiani explained that business jet use is not covered by the company's policy and used "on an exceptional basis."
"A typical corporate configuration has up to 20 seats, one or two private cabins with bathroom and shower, a meeting room, office, galley, informal area and crew rest [area]," according to a Boeing Business Jets spokesperson.
Ray added that Boeing Business Jets can customize aircraft built by Boeing Commercial Airplanes. The most popular model offered by the company is an 807-square-foot BBJ.
There also are also more options now available for corporations that need to use business jets occasionally, without owning aircraft, Balkar said. Whereas a BBJ costs around $50 million, companies can choose charter service providers that charge per flight, fractional ownership packages that start at $500,000 or pre-paid jet cards--like a 25-hour flight time card from NetJets for $120,000.
Luxury charter firm Royal Jet, based in Abu Dhabi, last month announced that it plans to invest $500 million to double its fleet by 2012. After launching in 2003, the operator currently runs 10 jets for charter services. Royal Jet president and chief executive Shane O'Hare told the Gulf Daily Newsthat charter flight demand experienced double-digit growth in the first eight months of the year, compared to the same period of 2006. Thirty-two new charter customers signed contracts with Royal Jet in the first seven months of 2007, he said, and monthly revenues are up 23 percent, year over year.