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GI manager reflects on Middle East charter challenges
Patrick Gordon has worked on the sale or winding down of three separate companies in the Middle East. He explains that just because a charter model works well in Europe or the US, it might not be right for the UAE.
Read this story in our December 2018 printed issue.

General manager of GI Aviation Patrick Gordon is the last man standing after the operator was officially shut down in July, and is in the process of selling its two Pilatus PC-12s. During his time in the Middle East he has wound down two companies and sold another.

GI was set up in 2016 and targeted legs of four hours or less, connecting Al Bateen with locations including Jeddah, Doha, Amman and Karachi. It was founded in response to business class seats on commercial airlines being 'expensive and often fully booked’, and its first PC-12 arrived in March of that year, with the second one following in December. Inspired by Hendell Aviation in Finland, which had recently achieved a single engine commercial licence, GI obtained its SET AOC in December 2016, the first certificate of its kind in the Gulf. As Gordon expains, the reality failed to live up to expectations:

“The Middle East has gone very soft indeed for charter,” he tells Business Air News. “People are just not spending the money and travelling here. Even if they have the money, they are cutting way back and not doing it.”

Gordon says that he is often brought in to Middle East companies as there is sometimes not enough local knowledge about how to shut down a company, or personnel may be embarrassed to do so. “Sometimes people make wrong decisions, or even if you make the right decisions, things can turn against you,” he continues. “When people looked at the GI Aviation business plan, it seemed to work really well everywhere else in the world, but when it came to applying it here the conditions didn’t work out.

“The environment in the Middle East is different, our cities are further apart, we don’t have satellite airports, so when you are making these flights you are up against airlines that make multiple trips a day to the same cities, and you can’t compete for price-per-mile. In Europe you can land at an airport closer to your destination, whereas in the Middle East everyone is landing at the same airports. Following two major wars in Europe, there are now airports everywhere, and that is also the case in the US, but in the Middle East we are limited.”

Cities are more densely populated in Europe and the US too: “The fact that you have a big geographical range to cover doesn’t mean anything if you don’t have the population in that circle. There are some single engine limitations in the Gulf, and you can’t go to India because you can’t use a single engine over the water. This takes another huge bite out of your operating circle.”

Gordon was tasked with turning GI around, as the company was ‘burning through cash’. Despite the financial turbulence, he says that employees have been continually paid on time.

“Our owner has been absolutely tremendous. I send a memo upstream once a month for payroll and operating costs and the money is there. He’s been doing that all the way through the shutdown process and I’m proud of him for that, he’s an honourable guy,” Gordon concludes.