Contributor - Middle East

Peter Shaw-Smith

Sharply declining asset values and poor charter performance are bedeviling the business aviation industry in the Levant, Jordan-based business jet operator Arab Wings has told AIN. “Charter is lower, for sure. The owners are suffering. There is not as much charter, because prices dropped. Aircraft are getting older. It is not a nice cycle at the moment,” said Ahmad Abu Ghazaleh, CEO of Arab Wings, a unit of the International Wings Group (IWG).

 


Although the Middle East market is in the doldrums, worldwide business aviation also faces trouble. “There is a global slump. Used business-jet prices have fallen below the floor that people thought they would hit. They are down 30 percent or more. Panic sellers are just accepting the prices being offered to them. There is no more pricing power in the market, and you can't predict preowned values. This is, historically speaking, the worst sellers’, and best buyers’, market ever seen in business aviation,” he said.

 


He cited the example of a local owner who recently lost 60 percent of the value of a brand new aircraft within four years. “He sold it 48 months later for 60 percent less than what he paid for it,” he said.

 


In terms of the aircraft in favor in the region, he said probably the most popular were the super-midsize, and large-cabin—large but not bizliners—such as the Embraer Lineage, Airbus ACJ and Boeing BBJ. The aircraft most affected by price drops were large-cabin jets carrying around 12 passengers.

 


“Eight years after the GFC [global financial crisis], people thought we’d be out of it a lot earlier. The problem was that the OEMs went berserk, producing many more aircraft than the market needed. They programmed annual production based on the boom years, and increased inventory and manufacturing lines, which were difficult to bring out of production,” he said.

 


Abu Ghazaleh was coy about the number of aircraft under management at Arab Wings today, saying only that it was similar to two years ago. “In Jordan, new aircraft under management include a Legacy 650. It’s been a calmer year for sure, calmer than last year. I am optimistic things are going to pick up next year,” he said.

 


“For sure the market here at Marka Airport is smaller now than it used to be. The market has slowed down. I have a feeling that next year will be a year where you'll see the beginning of a turnaround.”

 


Arab Wings’ Iraq Gate, which won its AOC in 2014, has three CRJ 200s, a King Air 200 and a Hawker 800XB in its charter fleet. “It works mostly with the oil-and-gas industry, and contractors in the country. The companies are quiet at the moment, but long-term, there are opportunities, with a lot of operations in remote areas. People come in and out, mostly in Anbar Province, and the central and southern areas.”

 


Arab Wings and the UAE’s Gulf Wings are owned by Jordan-based IWG, which also controls the Royal Jordanian Air Academy and Queen Noor Technical College. IWG recently established the RJAA Morocco Private Aviation Academy, located between Casablanca and Rabat, due to start operations by the end of the year.

 


“Training aircraft will most probably be Pipers, and there will be two simulators. Training and licenses will be for A&amp;Ps, or airframe and powerplant technicians. We are optimistic, as there is a lot of demand for [this] aviation academy,” Abu Ghazaleh said.

 


Meanwhile, the Arab Wings Maintenance Service Centre in Amman was recently tapped by Honeywell as an authorized dealer for its business aircraft avionics products. This allows the MRO to sell and support Honeywell cabin management and entertainment systems, satcoms and other avionics. It was awarded similar status with Rockwell Collins last year.

 


The maintenance center is also a Bombardier-authorized service facility (AOG line maintenance) for 600-series Challenger. It holds maintenance approvals from the Jordan Civil Aviation Regulatory Commission, as well as civil aviation authorities in Cayman Islands and Iraq.