Air charter industry in Dubai starting to regain altitude

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Etihad Airways

By Manoj Nair  gulfnews.com

By the looks of it the Gulf’s air charter industry is starting to regain altitude. No longer are all those expensive jets sitting around waiting interminably in their hangars for clients to call and fly. Be it for personal or for corporate use, they are being pressed into service in greater frequency than at any time in the last two years.

Etihad AirwaysAnd fleet operators are being called in even to offer niche services. Dubai-based Empire Aviation Group (EAG) is certainly feeling the lift, and has received a further boost through the signing of an agreement with RMSI, an emergency medical services company, to operate an intensive care air ambulance. A reconfigured Hawker 800XP business jet has been pressed into service and will be permanently based at the Dubai International Airport.

Paras Dhamecha, executive director of EAG, confirms that demand is certainly on the mend and takes an overview of what’s in store for the industry at large and what the company can expect from it.

Gulf News: There’s talk of an upturn in business jet services in some of the key international markets. Is a similar sentiment being shared by operators in the region?

Paras Dhamecha: There are definite signs of continued recovery, but aircraft sales remain sluggish though there are still good deals around for cash-rich buyers. Charter demand in 2010 had risen 20 per cent and we anticipate continued increase aligned with economic recovery and the resumption of growth. We believe that the charter operator market in the UAE and the GCC as a whole is experiencing a similar increase in charter business.

Are you looking to expand the fleet in the mid-term? What’s the current felt size? Are the aircraft owned or on dry lease?

The current fleet comprises more than 20 business jets, all of which are managed and operated on behalf of individual owners. We believe this is probably the largest managed fleet of private business jets in the region, which we have developed since launching the company in 2007.

The fleet will increase by two or three additional aircraft by mid-2011. Fleet aircraft are available for charter, which we also manage on behalf of owner-clients and which helps offset some of the standing costs of the aircraft.

EAG has adopted an asset management approach to private aviation to help owners optimise their investment and get the full financial and private travel benefits from their substantial investment.

Do you think there’s a nascent market emerging for business jets in essential services?

Private aviation serves a range of purposes — from a business productivity tool to luxury personal transportation. It can also serve as a tool for the ultimate emergency; missions for those who are in life-threatening medical conditions, in remote areas where appropriate treatment is not immediately available.

The key factor here is Dubai’s status as a private and commercial aviation hub and as a regional centre for health care. Combine this with the relative proximity (in terms of flying hours) to some of the regional flashpoints and to the remote operations commonly associated with oil exploration and mining, and then the potential to base medevac operations in Dubai becomes very clear.

Add the availability of skilled and experienced people, these factors create the optimal conditions for the development of an air ambulance service.

Is it a first of its kind for the local market where a private operator has been contracted for such a service? Is the scope of the arrangement limited to just Dubai?

We believe this service created by EAG and RMSI is unique in the region, in that EAG manages and operates a dedicated air ambulance, alongside the skilled medical evacuation mission capabilities of RMSI. It is a perfect union of aviation and medical skills and experience.

Before this service was launched, there was only the option of a normal private aircraft charter, with some concessions to the medical nature of the mission, which meant the addition of some equipment installed just for the flight. The new arrangement is a dedicated service based permanently in Dubai and ready to fly within two hours’ notice.

What’s the tenure of the contract? Are you looking at offering similar services in some of the other regional markets that you cover?

The contractual agreement between EAG and RMSI is a long-term strategic alliance. The major factor in terms of service development is Dubai’s location so it’s highly unlikely, at least at this stage, that we would consider basing another dedicated aircraft in another location in the region, at least in the near term.

Are there any regional markets in which you feel EAG is under-represented now? If yes, are you looking to widen the scope?

We already manage the float plane service from Abu Dhabi to Sir Bani Yas Island on behalf of TDIC. Dubai is a compelling place from which to do business in the region and internationally, but we are certainly looking to create the ability to position and operate aircraft in other locations on behalf of owners.

The subcontinent is likely to figure in our future plans as there is strong and growing interest in private aviation.

New aircraft are being positioned in the country but the infrastructure – such as private terminals – is still developing and the aviation skills required to manage aircraft are currently lacking.

We feel this is a gap that we could fill.

Of late there has been talk of more players vying for a share of the region’s air charter market. Do you feel it’s getting overcrowded?

There was consolidation in the regional industry through the recent global economic crisis and the companies that remain are those with the business model skills and experience to thrive and that can offer professional services and support to clients. We do not see the rush to private aviation recurring post the economic crisis.

And how would you assess your plans and prospects for 2011?

In terms of fleet, we will look to continue to develop the managed fleet, attracting new owners to us through our aircraft management services. Fleet development also drives our charter operations and we see a strong recovery happening in corporate and leisure charter as economic activity picks up. Fleet growth also drives our recruitment and we are already at 100 plus staff. This number will grow strongly in 2011.

In the leisure area, we have just announced a joint programme with Taj Hotels and Palace Group.

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