US private aviation company NetJets plans to open a new regional sales office in Dubai in the first quarter of 2020 as it looks to tap into the Middle East market and secure ‘15 to 20 customers a year’ in the region.
Billionaire Warren Buffett’s luxury plane arm, which sells fractional ownership in private jets, is looking beyond its traditional customer base in the US and Europe.
That is according to Michael Graham, senior vice-president at NetJets, who told The National that the firm is targeting family businesses, high net worth individuals and whole aircraft owners in the Middle East.
“Mideast aircraft owners are thinking much more pragmatically about how they fly, they don’t particularly want to have very capital-intensive assets sitting on the tarmac in their home city, it’s not particularly discrete,” Graham told the newspaper.
“What NetJets allows you to do is to put down a fraction of the cost of capital, a fraction of management and maintenance fees, and fly with much more discretion than you would do if you owned your own plane.”
Graham hopes that NetJet’s fractional ownership model will suit the Middle East, where ultra-wealthy individuals and corporations are re-evaluating how to spend their money.
He said: “We know that the majority of aircraft are only flown between 150 to 200 hours a year which does not make for particularly good use. When there are slowing economies or geopolitical tensions, it pushes people to take a much closer look at how they deploy their capital.”
NetJets is reportedly targeting 550 private jet owners in the Middle East made up of 10,000 high net-worth individuals worth more than $30m. It is also looking to cash in on the increasing trend for companies going public that are adopting shared jet ownership.
NetJets already as 50 customers in the Middle East but Mr Graham said in the interview that the company plans to attract 15 to 20 more customers each year in the region.
Saudi Arabia is currently NetJets’ largest market in the Middle East, followed by the UAE and Egypt. Services from Riyadh make up around 65% of its Middle East flights. Its flights from the wider region increased by more than 5% year-on-year to June 2019.