This website uses cookies
More information
Business Air News
Business Air News
The monthly news publication for aviation professionals.

Why visit ACE ’24?

Related background information from the Handbook...
The monthly news publication for aviation professionals.

Request your printed copy

Business aviation at the crossroads – how the Middle East and Europe interact
For operators in the luxury and large aircraft category, the Middle East has always been an important region, and never more so than now.

For operators in the luxury and large aircraft category, the Middle East has always been an important region, and never more so than now. Austerity across Europe may not have affected the heavy metal charter operators as much as the air taxis, but it is causing them to take more serious steps to find business in other parts of the world. Partnerships and deals in Asia, Africa and the Middle East are the order of the day.

Comlux Aviation, for example, has announced the relocation of its operations department and crew control centre to the region in a move that allows a wider coverage of the different time zones. Middle East commercial director Claire Brugirard says: "We have a team of approximately 50 people who are all permanently based in our regional office in Bahrain."

Other companies take full advantage of their relative geographic proximity to the Middle East region. GainJet believes its location in Greece is ideal, placing it in the centre of its three major target markets – Europe, Middle East and Africa.

Athens-based Amjet Executive agrees that, despite having no aircraft based in the Middle East, its strategic location between the Middle East and Africa and charter operations between the two allow it to be competitive for such routings.

Based in Turkey, the crossroads of Europe and the Middle East, air charter broker Apron Aviation clearly benefits from its location. Mehmet Ozdemir, Istanbul region coordinator, says almost half of the company's air charter business is to or from the Middle East.

European companies looking to take on charter work in the Gulf states are increasingly subject to strong competition from local operators. But companies such as Doha-based Rizon Jet complain that the playing field is not level when it comes to foreign operators looking to provide charter services within the EU. "Legislation protecting EU operators has not been fully thought through in terms of the charter client and therefore damages the industry," says ceo Captain Hassan Al-Mousawi.

"Given that most confirmations for charter occur at the end of a request-quotation-contract process prior to applying for permits, an objection in most cases results only in damage to the operator and client, and rarely in a contract for the objecting party."

And there is little recourse to appeal in the event of an objection, he says: "We recently had a flight where we received an objection for a wet lease client on a seventh freedom flight to France and upon engaging the operator to explain the situation were simply told that they neither believed our explanation or would consider withdrawing the objection." Rizon Jet sometimes has to chase up requests for non-objection which, given the last minute nature of much of its business, can cost it the booking. "It would be very helpful if a cut-off time could be enforced unilaterally as it is in some member states," suggests Al-Mousawi.

Others complain about the relative costs of simply flying services to Europe, among them Nexus, a company providing consultancy and flight support services from bases in Bahrain and Saudi Arabia. William Mermelstein, vp safety, quality and training, believes that the costs of handling and other flight-related services at airports in Europe tend to be higher and, in many cases, excessive. He gives an example: based on a 40-tonne aircraft and group three noise at night (corrected to euros), a flight into Paris Le Bourget works out at e429.21+VAT. The same flight into Jeddah comes in at just e165.80. "I imagine the cost is related to excessive taxation, labour rates and overall economic conditions," he says. "Actually, the internal European aircraft base is shrinking, so they have to charge more to recover these lost revenues."

This drop in the volume of operations in Europe is leading to an influx of skilled staff looking for work with Middle Eastern companies. Riyadh-based NasJet expects this to continue as Europe remains stuck in recession and general aviation movements decrease. Charter sales director Khalil Rachidi says: "On average we get at least 20 prospective European candidates enquiries a day, from crew, management and operations. Many key positions in our organisation continue to be held by both Saudis and Europeans. We launched in Saudi Arabia 13 years ago in partnership with the largest private aviation operator in the world and since then the operating processes have been very much international." Rizon Jet has a diverse workforce from all corners of the world with Europeans making up around a third. "European staff members – much like the rest of our workforce – have shown great commitment and dedication to the continued success of Rizon Jet and as such are highly valued," says Al-Mousawi.

Zur Banner of Israeli charter broker Lynx Jet believes he benefits from being located in one of the cheapest places to buy on-demand charter. Differences in taxation mean that jet fuel is considerably cheaper than in the European Union.

Overcoming the language barrier

Subtle language differences can prove obstructive, a problem NasJet director of maintenance Raghe Hassan has encountered when dealing with aircraft manufacturers. Understanding the local culture or the culture of a particular organisation will inevitably smooth the flow of business.

A company operating aircraft governed by European/EASA regulations may find this works in its favour. As GainJet's marketing direc-tor Andrew Hallak reveals: "Due to the strict regulations we must abide by, European-registered aircraft are viewed at a different level in regions like the Middle East. The market generally categorises them as more reliable and has greater confidence in the safety of the aircraft and the integrity of the operator. We believe more European registered aircraft in the region would raise the level of service and safety in the region."

A good indicator of the wealth to be found in some Middle Eastern countries, and their resilience during the economic crisis, is the continuing demand for larger aircraft. Caroline Jongma of Air Charter International notes that, as big jets are preferred even for small trips, prices remain fairly high. "Europe has more small jets than the Middle East, making prices and the choice of aircraft much more interesting and competitive. Europeans are more price-educated and know when they get a good deal. Middle Easterners will always negotiate," she says.

Luxury destinations are still in demand by Middle Eastern clients. Zil Air regularly carries such passengers on its island hopping services around the Seychelles. Ashvin Seeboo, commercial director, finds no problems conducting business with Middle Eastern clients as Zil Air's service is tailor-made to meet their requirements.

However, in 26 years of providing aeromedical services, Turkey-based Redstar Aviation reveals that it has never faced more critical or dangerous missions as a result of unrest in the Middle East region. Accountable manager Dr Mustafa Atac says: "I fear that the connection and cooperation between the European and Arab countries will eventually suffer from these poorly managed problems. RSA has lost count of the aborted missions as a result of the unrest aimed at policymakers locally and globally."

Atac also believes that closer control of the civil aviation authorities from EASA and FAA would contribute to the improve-ment of aeromedical services and cooperation between Europe and the Middle East.

Spanning the cultural divide

Understanding the culture, tradition and behaviours of passengers and their families is vital for medevac operators such as Redstar Aviation. The Middle East is a useful market for the organisation, however, shifting political situations from country to country can present difficulties, while other obstacles prove more critical. "Imposed sanctions may present danger to patients in need of advanced medical treatment and can hamper air medical services; RSA firmly believes that the UN should exclude these services from embargo and sanction criteria," says Dr Atac.

A shared aim of improving air medical services in the region has forged long-lasting partnerships and RSA says it has strategic alliances with almost all countries in the Middle East.

"The advantage of being located at Sabiha Gökcen International airport allows us to operate 'wing to wing' services with a number of operators worldwide," says Atac.

"Nearly 20 per cent of our business is from the Middle East and more than a third is from the republics of the Caspian and central Asia. The number of flights from the Middle East would increase substantially with the acquisition of a longer range aircraft, which is in the RSA growth programme for 2013."

Contributing factors for growth are, says Atac, the increase in the economic and leisure industry between Turkey and Arabia, a rapid development in medical treatments in Turkey and, less positively, the polarisation factors in the region making Turkey the country of choice.

Atac proposes that the aeromedical industry as a whole can overcome the problems caused by political upheaval, saying: "Those involved in the industry have reached a common understanding, easing cultural differences for a common cause. There is still much to do and long way to go – the handling and aeromedical services at some airports definitely need further improvements."

Between 30 and 40 per cent of Amjet Executive's charter business comes from the Middle East and Africa and Christian Loiseau believes the ability to meet client needs stretches back to the company's origins: "Amjet Executive is driven by one man's lifelong passion for aviation. Captain Abakar Manany founded the company in 2009 with a clear vision, to provide a multicultural background in order to offer services of the utmost quality to clients from the Middle East in particular."

Recognising that the marketplace remains competitive, Capt. Abakar Manany believes Amjet's offering of latest generation or recently refurbished aircraft aimed at meeting every travel requirement – business, pleasure, government mission, group tours or sports teams – keep the charter sales department busy.

"This second part of 2012 is seeing some positive indicators regarding the business aviation industry," he says. "As we are still in a period of worldwide economic instability, our guidelines remain the same – we conduct partnerships and strategies with pragmatism. EU/ME/Africa cooperation could be more focussed on safety, for example."

Since its beginnings, GainJet Aviation SA too has worked on developing its business in the Middle East and has a vested interest in the region. That lucrative market is one of the reasons for locating its headquarters in Athens, a central point from which to service the EMEA region. Andrew Hallak says: "About 30 per cent of our total air charter business is either to or from the Middle East and of that around 65-70 per cent are passengers from the region."

GainJet has a permanent base in Kuwait where it keeps one aircraft that moves between Kuwait and Europe, usually its Gulfstream G550 or Global Express XRS which are popular with Middle Eastern clients.

"We also have strategic alliances, primarily in Kuwait but also in other areas of the Gulf. We are in the process of acquiring several aircraft which we plan to base in the region," says Hallak.

He believes that European/African operators attempting to conduct business in the Middle East may not find it plain sailing. "In general, and especially with a worldwide operation like GainJet's, when crossing borders and doing business abroad you are bound to find obstacles such as language barriers or different cultural/business practices. And regulations differ, which could be an issue. So it is actually difficult for a European/African to deal with Middle Eastern customers and suppliers, and operate in the region."

GainJet, however, has always invested resources in its Middle East business and, through its experience in the region and multilingual staff, ensures it has the necessary tools to overcome any obstacles.

Mehmet Ozdemir of Apron Aviation in Turkey believes that Europe has reached a higher quality service level than the Middle East. "First of all, there is no need to obtain permission for Europe except for some exceptions, and it has much better organised airports."

"I think there should be an organisation to indicate service quality standards and all Europe and Middle Eastern airports should have a place in it, in the same pot," Ozdemir says.

Strong relationships with local operators help those companies without a base in the Middle East conduct business successfully.

OMNI Aviation is based in Portugal, and has forged useful alliances with local operators.

Pedro Caneira reveals that a significant share of clients for its vip airliners are from the Middle East region and cultural issues have not been an impediment to finding business there: "Currently we don't feel any barriers and these days we find that a significant part of our counterparts are not locals," says Caneira. In fact, he does not view the region as presenting its own specific challenges: "Today the market is global so the competition we face in the region is common to the other parts of the world. We believe that today's standards are quite close, so every operator is aware of the client's profile from every region in the world. For us, as a Portuguese company, we have a strong Arab influence from centuries ago, so there is a natural historic bond between our cultures."

OMNI has an EMS Learjet 45 based in Abu Dhabi for an aeromedical contract.

Zurich-headquartered Comlux has a base in the Middle East and around 30-40 per cent of its business is either to or from the region, a reflection of its growing importance to the company and business aviation in general, reports Claire Brugirard. "This was the major factor for investing more there; a regional office was opened in Bahrain two years ago to cater to a higher demand from this area with the objective of being closer to our customers," she says.

"Currently we have an Airbus ACJ320, ACJ319 and Boeing 767 BBJ in vip configuration which operate out of the Middle East. All three are very much appreciated by Middle Eastern customers, especially with the luggage capacity the aircraft offer."

Brugirard points out that doing business successfully in the Middle East requires an understanding of the market, its players and, most importantly, an understanding of the culture. "The way that people do business there is simply different from the way that people do business in Europe," she says. "European and African businesses can definitely be successful in the Middle East, as long as they have the right expertise and cultural awareness in-house."

Business aviation within the Middle East has marked its importance and put itself on the world map over the last couple of years and Brugirard agrees that it is an important region that cannot be neglected. "Having said that, the grey market is still a big challenge and a lot of operators in the Middle East have to cope with this phenomenon regularly.

"It is clear that the Middle East and Europe need each other; sometimes the supply available in one region does not cover the demand. In such a situation strong alliances between the two make it possible to create flexibility to move the supply towards the areas of demand."

Depending on the season, charter sales director Khalil Rachidi of Riyadh-based NasJet estimates flights to and from Europe constitute around a third of its overall business. "We are beginning to see growth as brokers are beginning to realise our business model is now focused more on aircraft management and charter, whereas for the past 12 years its been fractional." NasJet has recently listed its charter fleet on Avinode.

For all NasJet programmes and services there are no fixed bases and the company focusses on serving client requirements based on their location. Many of the programmes offered guarantee aircraft availability, including block charter, in which case an aircraft has to be available within a specified time frame. "Currently our strategic alliances are with internally audited, approved European operators and in the US we work with Jet Aviation," says Rachidi. "Ideally, we only request support from operators with similar aircraft types to our core fleet, ensuring clients are familiar with the aircraft."

According to Raghe Hassan, NasJet director of maintenance, dealing with the EU from a commercial perspective presents a few issues, including time zone differences and the fact that weekends in Saudi Arabia are Thursday to Friday. "Both parties effectively lose two days in the week. This has an impact on efficiency if you are dealing with administrative or banking issues."

Europe is a useful market for NasJet, since many of its Middle Eastern clients have strong ties with the region either in the form of investments, holiday homes or schooling for their children. "We would like to see more activity between the two regions, especially from European and Russian clients flying internally in the Middle East, and particularly from the UAE," says Rachidi. "The Middle East is also beginning to see new European entrants trying to service the local market, clearly indicating a close tie between the two continents."

Director Hardy Sohanpal believes that the Middle East has become an extension of European business aviation and many countries in the region are looking to Europe in adopting civil aviation regulations. "As charter operators we are all aiming for the Holy Grail of efficiency and this can only come by collaborating with each other. The two associations, EBAA and MEBAA, should consider a white paper on the relationship between the two regions in terms of movements, services provided etc.

"NasJet would also welcome more statistical data on GA between the two regions, particularly on movements and the contribution Middle East operators make to the European economy."

Rizon Jet is the only Middle East owned operator to operate an FBO in Europe with its facility at Biggin Hill. It also has an affiliation with Oryx Jet, a UK AOC holder.

"In terms of hours, approximately 40 per cent of our business is to or from Europe," says Captain Hassan Al-Mousawi. "Almost none originates in Europe, although naturally over the summer peak we may drop our regional clients off to pick them up a month or so later."

Rizon Jet's multicultural team is experienced in dealing with people from a range of countries, although it rarely secures flights from EU nationals originating from within ECAC member states.

Three quarters of the flights for which Nexus provides services originate or terminate in the Middle East and North Africa region, while the remainder overfly. "The demand in the Middle East is for larger and newer aircraft typically, when compared to the general charter market in Europe," says William Mermelstein.

"Everyone has been affected by the economic problems of Europe, but the Middle East not so badly."

Looking further afield

While working hard to extend business connections between Europe and the Middle East, the smart operators are also looking to Africa for business opportunities. And it is no wonder, with figures showing impressive increases in movements across the continent.

Lagos-based Evergreen Apple Nigeria has not just noted increasing aircraft movements but also a broader range of originating and outgoing destinations and a growth in demand for its FBO services.

"After more than a year of operations we have a firm foothold and can see a variety of client patterns and trends emerging," says ceo Segun Demuren.

Business aviation movements have increased by over 100 per cent year-on-year and daily movements are running at an average of 15 daily.

Flights are arriving into the FBO predominantly from Europe with London, Ireland, Germany, Spain, France and Austria all featuring as regular starting points. Driving the growth is the expansion of the oil and gas energy industries which is seeing increased interest from European companies. Flight arrivals from the Middle East are also growing, with Dubai, Saudi Arabia and Aman rating highest in terms of originating destinations.

National flights within Nigeria and from further afield including Gambia, Cameroon, Ghana and Equatorial Guinea all reflect the increase in African business aviation activity driven by the continent's continued expansion of energy, mineral, agricultural and telecom sectors.

Owing to the size of the continent, mid to heavy jets are proving most popular at the EAN hangar. Gulfstream 400/450 models, the Global Express family and Challenger types from 601s to 850s are regularly parking up at the hangar. "Longer range fleets are working much harder than the shorter range aircraft and we note that our handlers are mainly taking care of the mid to heavy jets on a regular basis," says Demuren. Charter operators provide the main body of traffic through the airport but, increasingly, privately owned aircraft belonging to local entrepreneurs are contributing to movement figures.

However, while Africa may look like an easy proposition from the outside, for those already based there, changing political landscapes can make the going tough. Debonair (Private) Limited operates out of Harare, Zimbabwe, providing shuttle flights to the mining industry on a daily basis.

"We have wanted to develop the aviation industry further in Zimbabwe to include scheduled operations to meet the growing demands of the tourist industry there," explains director Kevin Smeda. "However, the Zimbabwe government has recently restarted Air Zimbabwe with the support of Chinese participation. Although we have an air service permit for scheduled flights from Zimbabwe, the government is not allowing us to use it."

Debonair operates the King Air 200 series of aircraft which has been the mainstay of its business operation. Its C421 proved too expensive to operate and was no longer competitive, but Smeda says: "It was a delightful aircraft to fly and well liked by our clients. Every dog has its day I guess.

"We have always focused on the corporate market with a specific interest in providing a tailored service to clients. It's because of this concept that we have survived so well."

Smeda sees a need for a reliable flight between Harare and Victoria Falls as a major tourist attraction. Smaller centres such as Kariba, Chiredzi, Hwange and Bulawayo would also benefit from a smaller operation such as his to meet the needs of local industry, he says. "I would sorely love to operate a reliable service on the major routes Harare-Johannesburg-Victoria Falls and there may very well be in future if we could encourage the government to permit an open skies policy."

With Smeda currently flying for a commercial airline in Dubai, expanding business into the UAE is also a real possibility.

Other News
 
VOO automates pricing with REDiFly integration
April 19, 2024
VOO users will benefit from real-time access to accurate aircraft availability and location info synchronised from REDiFly. This eliminates the need for manual data entry and ensures that calculated prices are up-to-date.
Thibault and Champonnois join Chapman Freeborn
March 26, 2024
The decades of expertise brought by Mark Thibault and Alain Champonnois, combined with local market knowledge for their regions, will bring opportunities as they execute growth strategies for APAC and IMEA.
Comlux celebrates delivery of second ACJ TwoTwenty cabin
February 22, 2024
With the second of 15 ACJ 220 cabin completions under its belt, Comlux has engineered a full support package for operators, adding P&W for the engines to the Airbus airframe support and its own cabin commitment.