FBO Survey: Covering Europe, Middle East, Asia and Africa
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FAviatBOSUion International NewsRVEY 2007 EUROPE, MIDDLE EAST, ASIA AND AFRICA tarmac titans Predicted growth is finally coming to FBOs outside Europe and the Americas SPECIAL REPORT COVERING EUROPE, MIDDLE EAST, ASIA AND AFRICA by Charles Alcock ll the leading forecasts come” approach to the emerging business wave of private equity fund takeover activity agree that business avia- aviation markets. among international FBOs. tion is an increasingly In other instances, the market’s ability global phenomenon that to respond to rising demand for specialist Rising Tide Floats will see growth rates for ground handling services is artificially im- New FBOs in Middle East aircraft and flying activity rise faster in the peded by factors such as a lack of avail- In the Middle East, concerted efforts are astill relatively immature markets of Europe, able airport real estate and unwillingness at last being made to develop the handling the Middle East and Asia. This should be on the part of airport management and es- infrastructure required to match the rising excellent news for anyone in the business tablished major airlines to tolerate any demand for business aircraft. Dubai in the of running FBOs and the myriad service new competition. United Arab Emirates (UAE) continues to be companies providing handling and flight For close to a decade, industry ob- the region’s epicenter for business aviation. planning. But in reality FBO growth in Eu- servers have been telling AIN to expect a As of next year it is set to boast the mother rope appears still to be somewhat modest, wave of consolidation on the international of all FBOs in the shape of the planned and the expansion of support infrastructure FBO scene, with larger groups swallowing Executive Flight Centre at the new Dubai in continents farther east and south is only up smaller, independent operations in World Central airport, which has been de- now beginning to gather any momentum. the interest of pursuing growth through signed to receive as many as 100,000 busi- With some notable and recent excep- greater economies of scale and market ness aircraft movements annually. tions, prospective FBOs appear to take a clout. But in practice there has been rela- What remains unclear about Executive cautious attitude to expanding their oper- tively little consolidation. Flight Centre is which of the specialist ations in unfamiliar regions. Evidently And, with the exception of Permira’s ac- handling groups might set up FBOs under the costs and the stakes are simply too quisition of the Jet Aviation group in 2005, its roof. Jet Aviation and ExecuJet Aviation high to take an “if we build it, they will there is little sign of the long-anticipated have recently made substantial investments Jet Aviation’s new facility in Dubai ranked fourth overall in this year’s survey of FBOs in Europe, the Middle East, Asia and Africa. in new FBOs at the existing Dubai International Airport. and India are the two countries where all business avia- “The proliferation of such centers will see a considerable Executive Flight Service, a subsidiary of Dubai Inter- tion service providers with any aspirations for interna- increase in the tangible services that can be delivered.” national Airport, has recently opened a new bizav termi- tional growth would like to get established. Both are Hawker Pacific is paying particular attention to crew nal away from the main passenger terminals and close to short of dedicated infrastructure for handling business requirements at its new facilities by installing separate the site of the biennial Dubai Air Show. This effectively aircraft, and would-be FBOs face significant bureau- lounges, entertainment and information technology sys- replaces the existing Al Majlis VIP terminal, where mak- cratic hurdles. tems and sleeper seats. The new Shanghai FBO will in- ing arrangements for aircraft parking had become a chal- But in China, at least, the situation is beginning to clude a gym. lenge for handlers. The new Executive Flight Service change, with plans in place for facilities that might In Hendry’s view, most of the Asia-Pacific market for facility, which offers 14 lounges and its own customs match those already available in Hong Kong and Macau. business aircraft handling is still evolving and is many and immigration channels, is being run in partnership In Beijing, existing handler Capital Jet (see survey re- years from achieving any degree of maturity. “Taking with flight-planning group Universal Weather & Avia- sults box on page 28) expects to complete a new 75,000- Australia as an example, typically the NBAA annual tion, which has also opened its new Middle East Opera- sq-ft facility by October. A big driver for the new FBO, convention plays host to more corporate jets in its static tions Center in Dubai. which will feature extensive lounges for visiting digni- display than we have on the Australian register,” he said. At the UAE’s other main business center, executive taries, is the 2008 Olympic Games in Beijing. Capital Jet Hendry said that while business aviation market charter firm Royal Jet runs an FBO at Abu Dhabi Inter- is a subsidiary of Beijing Capital International Airport. growth is undoubtedly strong in the region, it will be national Airport. With the airport now embarking on an Meanwhile, Australian group Hawker Pacific has set some time–up to 10 years, perhaps–before there is suffi- expansion plan, Royal Jet is preparing to build cient critical mass to support an influx of substan- a new business aviation service and support tial new FBOs competing with existing small complex that will include hangars. This facility niche operators. It is for this reason that Hawker is expected to open within three to five years. Pacific is opting to develop so-called “centers of Elsewhere in the wealthy Arabian Gulf excellence” that will provide handling services states and the wider Middle East, other airports and offer aircraft maintenance, as well as charter are starting to attract new FBO developments. and management packages. Kuwait International Airport is set to open its new executive terminal in September. The Asian FBO: first tenant will be an FBO partnership between ‘Man on Scooter with Laptop’ local company Royal Wings Aviation Services According to Vic Gregg, Asia/Pacific regional and the U.S.-based Mercury Air Group. manager for UVGlobal Network, there is a broad Executive charter group United Aviation is spectrum of ground handling service throughout building the large facility, which will offer ex- the region and equally large variations in pricing tensive, dedicated parking areas for business structure. “There are myriad providers, and it can aircraft. The building will feature several high- be quite a culture shock for Western crews when end restaurants and stores. they open the aircraft door to be met by a man on At Jordan’s Amman International Airport, a scooter with a laptop,” he told AIN. Jordanian Private Jet Services is offering full “Corporate operators need to understand that service handling for business aircraft. It can business aviation is in its infancy there, and their also support operations at Aqaba’s King Hus- expectations of service need to be tempered.” sein International Airport. Dubai has become the epicenter of business aviation in the That said, Universal does require handlers who serve Middle East. Jet Aviation and ExecuJet Aviation operate at Dubai Even the war-torn Lebanese capital of Beirut will soon International Airport, so what firms will operate at the nation’s its flight-planning clients to meet minimum standards. have two FBOs at its Rafic Hariri International Airport. in-development Dubai World Central airport has yet to be decided. “We don’t compromise on these, even if it means pro- The Cedar Jet Center, part of Middle East Airlines viding our own resources to achieve this level of serv- Ground Handling, is about to face new competition from ice,” said Gregg. a joint venture between Universal Weather & Aviation and up a joint venture with the Shanghai Airport Authority to Universal plans to expand its service footprint in the local charter firm Imperial (formerly Cirrus Middle East). establish a 27,000-sq-ft FBO at the city’s downtown fastest-growing parts of the Asia/Pacific region, such as Both FBOs operate from the airport’s general aviation Hongqiao Airport (with more than 100,000 sq ft of ramp China, India and Japan. It will accomplish this by open- terminal. Cedar Jet can offer maintenance support space). The new base, which will have adjoining mainte- ing its own facilities in some locations and establishing through the engineering division of sister company Mid- nance facilities and will be built around the airport’s ex- joint ventures with credible partners in others. In dle East Airlines. isting VIP lounges, is due to open next May. Signature Gregg’s view, government officials in the region are at According to Lex den Herder, Universal’s director of Flight Support and Jet Aviation had reportedly been in last starting to develop a better appreciation of why the UVGlobal Network development and acquisitions, the contention for the new FBO project. needs of business aviation are different from those of company has been preparing the Beirut project for more Hawker Pacific already has three FBOs in Australia, airline operators. The result is a more flexible approach than three years and has remained committed to it even at Sydney, Brisbane and Cairns. The company is consid- to allocating infrastructure and processing paperwork. when Lebanon once again became the battleground for a ering a project to develop a new FBO at Melbourne’s Es- Meanwhile, Hong Kong-based BAA Jet Manage- bloody conflict between Israeli and Hezbollah forces.