As glitzy as the Middle East is, corporate executives flying to meetings in private jets isn’t the established norm.
“In this part of the world, the buyers of business jets tend to be principals at corporations who use it as a private jet, not necessarily as a business tool. This is in contrast to the rest of the world where a jet is used as a corporate tool,” according to Paras Dhamecha, managing director at Dubai-based private jet operator Empire Aviation Group (EAG).
However, despite economic tightness regionally, Dhamecha expects that dynamic to transform soon.
Founded in 2007, Empire Aviation group operates private jets for owners under an asset under management model, charters them to others in the market to fly private, and buys and sells aircraft for the owners it works with.
“Just in terms of aircraft sales, this is the best year we’ve had since we began with the business,” Dhamecha said in an interview with Arabian Business this week.
Pinpointing why the particular section of the business is doing well is hard, according to Dhamecha. Aircraft sales are cyclical and sales can vary considerably across geographies depending on their economic health.
However, Dubai’s last economic downturn in 2008 could hold some answers.
“I’d put it down to aircraft values, they were so good that people interested in buying earlier but unable to then jumped in,” he said. “We grew a lot that year.”
Something similar could be looking to happen again in the region.
“Things aren’t as bad as everyone is making them out to be,” said Dhamecha, referring to a slowing in the UAE, and the GCC’s, growth rate that began in 2014.
Despite oil prices recovering from historic lows, the region’s economy has yet to regain the lustre that made it one of the world’s fastest growing. However, Dhamecha argues, “everyone is still making money. Just not as much as earlier,” he says.
In fact, “corporate executives that charter more than 200 hours each year on private jets are best poised to look at ownership options,” says Dhamecha. “The prices right now are just right for that.”
As businesses adjust to “a new normal” one that involves lower margins and larger volumes, the Middle East could see a greater focus on saving time, Dhamecha ventures.
“Try flying with commercial carriers and you lose a whole day waiting to check in, more because you’re early or late to the meeting, then more again waiting for the return flight,” he says.
“It makes a lot more sense for three VPs to go from Dubai to Muscat, have a one-hour meeting and be back in the office by the afternoon.”
Mature markets “like the US, Europe, and South Asia” have realised this for a while, he says. The key difference here is that private jets are used as a corporate tool. “In the region you mostly see jet owners being principals at a large business, and they tend to use their jets as private jets,” says Dhamecha.
“As the market opens up, high volume businesses will begin realising even more that corporate jets are a formidable corporate tool.”
Source: Arabian Business