Contributor - Middle East

Peter Shaw-Smith

Various challenges facing the regional business aviation industry’s FBO sector were addressed at the MEBAA Conference on Monday (December 5), as a number of factors hampering progress were identified. Stakeholders set out a vision for the future in a panel titled, “The Importance of FBOs at Airports.”

 


Ahmed Al Ansari, acting CEO, Dubai South, said that the importance of business aviation to the future success of Al Maktoum International Airport (AMIA) was clearly recognized both by government and industry. “As Sheikh Mohammed once said…we are trying to [create] the aviation capital of the world in Dubai. That’s bound to affect all the programs and initiatives to build the ecosystem,” he said.

 


“[The scope of the airport’s future] is not limited to business aviation, but the whole aviation industry. Strategically, we know how important business aviation is for any airport,” added Ansari.

 


The meteoric rise of Jetex Flight Support, which has expanded inexorably from trip support into the FBO space ever since setting up its facility in Le Bourget, Paris, in 2009, has been one of the real success stories of the regional bizav sector. It now runs 11 FBOs around the world, and is looking to open more.

 


Adel Mardini, Jetex president and CEO, stressed his commitment to the long-term at DWC, despite the current industry malaise. “Definitely, our investment in Dubai South is for the long-term,” he said.

 


Mardini is looking to bid for new FBO facilities around the region and beyond, and the lack of infrastructure in Saudi Arabia, where FBOs are present only at its international airports in Jeddah, Riyadh, Dammam and Medina, signals new opportunities to set up additional facilities at 24 other regional airports.

 


“We can see new development in Saudi Arabia and Oman, with the new airport [terminal and FBO set-up in Muscat]. There is a chance for a licence or two in Oman. There is an expansion in infrastructure in airports in the region. There will be good growth in future,” he said.

 


FBO operators have to be sensitive to the country they are operating in. Mardini said that the regulations in different international jurisdictions make standardizing the same FBO product in various locations difficult. “Jetex operates FBOs at 11 airports. Each airport has its own rules and regulations, and [the framework to be applied] is something that [only] the countries themselves [can decide],” he said.

 


The issue of how best to configure the interest from service-providers to best meet the needs of the airport’s development is topical. DWC is understood to have halted the licencing of new FBO players until 20,000 movements take place a year, a development that may transpire around the time of Expo 2020.

 


David Best, principal, Claymore Hill Advisory, said setting up the right competitive environment at an airport is important, when so many people want to be involved. That been shown by the strong buy-in of potential FBO players at DWC.

 


“I think getting the balance of competition right [is an interesting problem]. If it is too liberal, and you are not demanding on standards and investment from operators, then quite often you get a race to the bottom on price, with not enough money being generated to really invest in facilities and safety.”

 


With one infrastructure operator, in a more monopolistic, government-backed model, he suggested that prices tend to be extremely high, leaving the customer base unsatisfied.

 


Best said competition needs to be strong enough to drive an improvement in standards, and ensure that people run a safe operation for the airport’s reputation, but not so strong as to be counter-productive.

 


The shortage of trained staff is another issue of concern to the regional industry, particularly in the FBO space, with luxury hotels just as likely to be recruiting prospects as the aviation industry.

 


“There is a serious issue about the shortage of personnel we face. We have to talk about it and raise awareness. No one is talking about the shortage,” said MEBAA chairman, Ali Alnaqbi, referring not only to a lack of FBO personnel, but pilots, engineers and technicians as well.

 


“So many young people don'’ know this field exists. Not enough people see business aviation as a viable career,” said Xjet CEO, Josh Stewart.

 


The FBO Industry faces huge structural challenges, including how to deal with the likely increase in throughput, given the incidence of high-net-worth individuals abandoning commercial aviation for private flying, Best concluded.

New developments at FBOs including regulations and noise issues; legal disputes; openings, acquisitions and mergers.