Holger Ostheimer isn’t afraid of the tide. As managing director of DC Aviation Al Futtaim, a joint venture between aircraft management company DC Aviation (formerly Daimler Chrysler Aviation) and UAE facility management firm, Al Futtaim, he stands right in the middle and shoots hard and straight–that private aviation is a segmented market, and DC Aviation exists to occupy the rung of service reserved for top quality maintenance providers.
For six years, he has been right. DCAF began operations primarily as a manager for Al Futtaim aircraft. Since then, at its facilities at DWC, the company has grown to manage a fleet of two Challenger 604s, Gulfstream 200, and a Dassault Falcon X.
It recently also partnered with Lufthansa Technic to build its portfolio of capabilities in servicing Airbus’ A320 and the Boeing Business jet family, which Ostheimer says, “is a great learning experience.” The company has also signed an agreement with Bombardier for its Global Express aircraft that will allow it to meet demand from outside of the region for its charter business.
“2016 was a great year for us,” he says. “The market is responding very well to us and our facilities in the region. The reputable operators in the region know that our purpose is to assure the client of the safest, most reliable, top quality service available.”
But something else has also changed since 2011. A new breed of companies such as Jetsmarter and Jetscout, that are hoping to democratise private and business aviation has emerged. Powered by the internet and apps, these 21st century companies present operators with a unique proposition–to commoditise seats, and boost aircraft utilisation, the way Uber did.
In a global business aviation market that is somewhere between slumping and snoozing, keeping planes in the air has gotten the market talking. Ostheimer agrees. These companies are aggressive, he says. But theirs is a dream that can’t become reality.
“It remains to be proven how far they remain successful in providing lift for a very demanding clientele under the same scrutiny of flight quality and safety standards,” he says. There’s a lot of talk of opportunity, but providing a service at low-margins isn’t mirrored in the maintenance world by a reduction in standards of flight safety, maintenance and reliability required, according to Ostheimer. “A service level comes at a price tag.”
DCAF has been approached by operators requesting for its services on aircraft with high utilisation rates. But the issue is one that Ostheimer believes needs to be understood in its entirety.
Low-cost services are part of the reason why the charter services market is suffering, according to him. A world where aircraft operators can lease aircraft and keep utilisation rates high at low margins while paying similar minimums to maintain safety, “is a myth,” says Ostheimer. “The companies insuring these aircraft and the ones financing them obviously have a concern for the aircraft’s residual value as well. Not only does being diligent in maintenance ensure safety, but also ensures the aircraft maintains a level of quality at the end of its lease or service,” he says.
“If you want to deliver top quality maintenance and services, then you need top people,” he says. An operator can choose to keep utilisation up by offering a low cost service, “but that doesn’t make top people or top services come cheap,” he says. “When you’re offering the cheapest possible services, you cannot naturally expect top level quality for the same price.”
Some operators are buying into the new services, a development which Ostheimer sees as a fracturing of the market, but something that doesn’t concern DCAF. “I think it is good advice to anyone in any line of business thinking of setting up a business here, to partner with a strong local partner,” says Holger Ostheimer, managing director of DCAF. Both parties are in agreement on the proposition to the market, and as the results show, it’s working, he says. By the Dubai Airshow in November, DCAF plans to open a new hangar facility, offering it the ability to cater to demand which it is having trouble keeping up with, according to Ostheimer.
“You can’t always choose which aircraft come to you in the aircraft management business, but you can choose which maintenance capabilities you want to develop. Our adding capabilities is a signal that DCAF is in the region for the long haul. The plans for Dubai World Central and the high concentration of ultra-high net worth individuals with access to private and business jets makes this a market to be in, he says. “You do not get into the level of investment that DC and Al Futtaim have undertaken, without long term plans.”