Thursday, Nov 19, 2009

Gulf News

Dubai Aerion, a Nevada-based engineering firm, is seeking a joint venture partnership to develop a supersonic business jet.

The plane has been designed to fly 4,500 nautical miles at 1.6 Mach. This could take passengers from Dubai to London in 4 hours and 55 minutes - saving at least two hours.

Launched in 2007, the 8-12 seat supersonic business jet costs $80 million at list price and could be ready for delivery by 2016 if a joint venture with any credible airframe manufacturer is set up by next year, Brian Barents, vice president of Aerion, said.

The aircraft has already registered 50 firm orders from potential buyers, with an order backlog of $4 billion.

Nearly a quarter of the total orders are from the Middle East.

Dubai Business aviation has taken a major hit worldwide, declining 40 per cent this year, industry officials said.

Globally 22,000 business jets are serving the needs of individual and corporates.

"Every year, between 1,200 to 1,400 business jets are added to the active fleet," Brian Barents, vice president of Aerion, a Nevada, USA-based engineering group, which is trying to cobble together a new supersonic business jet which is expected to reduce travel time drastically.

"However, the market has taken a serious hit this year, declining by 40 per cent. Although things are looking up, it might take up to 2012 for the industry to get back to the 2007 level."

The business aviation market is relatively new and small in the Middle East. Although blessed by huge natural wealth and the abundance of high networth individuals, the market has not picked up for a long time, until recently.

Active business jet fleet size in the Middle East has risen to 450 and 133 companies have so far registered with the Middle East Business Aviation Association (MEBAA) a nascent industry body.

"The market has seen some major upturn in recent years, before the financial crisis hit the region," Ali Ahmad Al Naqbi, founding chairman of MEBAA, told Gulf News.

"We have seen a steady growth in our membership. We hope this will soon reach 300."

Dubai International Airport remains the region's biggest business aviation hub. Between January and July 2009, the airport's Executive Flights Centre (EFC) handled 2,986 flight movements and 10,145 customers. In 2008 the EFC terminal handled a total 7,585 flight movements compared to 9,432 in 2007. Launched in April 1988, the Executive Flights Centre (EFC) is the largest dedicated business aviation terminal of its kind in the Middle East. It is located close to Dubai International's Terminal 2.

He said the global financial crisis has impacted the region's business aviation market.

Fast pick-up

"We are not an isolated region. The economic downturn impacted us, This year, the market has taken a hit up to 30 per cent initially. However, things have picked up fast. During the second half, the market has picked up quickly," Naqbi said.

"We expect the business aviation market to grow between 12 to 15 per cent annually for the next five years.

"Business aviation is no longer a luxury. It has become a necessity for many and a solid business for the service providers."

According to Honeywell Business Aviation Outlook, 11,000 new business jets worth $200 billion (Dh735.6 billion) will be delivered worldwide between 2009 and 2019. Honeywell has lowered this year's deliveries from 1,139 to 750-800, due to the current economic crisis. Honeywell predictions highlight the Middle East, Africa and Asia to be the most promising region for the business jet market. It expects the Middle East to lead the recovery.

Mike Berry, managing director of ExecuJet Middle East, said, "Due to the economic slowdown, the market has also shifted from high networth individuals to more on corporate travel."

Abu Dhabi has recently turned its old Al Bateen airport into a business aviation hub for corporate jets.

Echoing Naqbi's views, Barents said, "This is a growing market with a lot of potentials. Before the crisis, we've seen some strong growth in the Middle East market."

The market, however, is soon going to face challenges for not having enough maintenance, repair and overhaul (MRO) facilities.

Al Naqbi said, "Lack of business aviation facilities are a growing concern for us. I urge the investors to pump into more MRO facilities so that this large fleet could be maintained properly."

In Dubai, ExecuJet Middle East has set up an MRO and Fixed-base operation (FBO) for business jets.

The market is not yet regulated for safety standards. However, Al Naqbi said, MEBAA is working with regulators to formulate guidelines for the industry.

By Saifur Rahman

Gulf News 2009. All rights reserved.