Arriving in Style

An Interview with the Middle East Business Aviation Association

Business aviation is soaring in the Middle East as executives and the super rich ditch the commercial carriers in favour of the ultimate in air travel. Ammar Balkar, co-founder and CEO of the Middle East Business Aviation Association (MEBAA) believes the industry is on course to reach even greater heights.

“90% of MEBAA passengers are business travellers”

BM. How did MEBAA come into existence and what is its mission?
Ammar Balkar. MEBAA was established in June 2006. However, when we first started Royal Jet in Abu Dhabi in 2000, but didn’t start operating until 2003, we
wanted to see how feasible the project was so needed to get some data from the market. However, it was very difficult to get some data on the industry, the types of aircraft operated, operators, handling agents, airports available, etcetera. Overall, it was very hard to get information. Therefore, during my time with Royal Jet as VP of Sales and Marketing during 2005, we decided to check the market and organise a conference to handle this industry in particular – not the major airlines or national carriers.

And it was a very successful conference (held at the Dubai Air Show) and afterwards 1we announced the formation of MEBAA. The response was great and companies, operators and manufacturers were very enthusiastic about setting up something that would handle their issues, their concerns and promote this industry. And hence, 16 founding members – probably the biggest names in the industry – established MEBAA. Today, this figure has grown to 95 members. The whole purpose is to have one single platform that can communicate the concerns and the needs of the operators to the authorities, to the regulatory bodies and governments, as well as promote the industry to the media.

BM. You spent your whole career working in aviation in the region. How have you seen private aviation rise in prominence and what do you think is driving this growth in the Middle East?
AB. The growth has been tremendous because the region was a virgin territory for the industry. Between 1975 and 1999 there was only one operator covering the whole region. From 1999 onwards there has been 22 new operators in the region so this gives you an indication of the growth.

Also, back in the 1970s there were probably one or two handling agents. Today, there are more than 20. The reason why is because back in the 1970s there was no need for people to move around as quickly as possible. Time wasn’t really an important aspect because everyone was in less of a hurry.
Privacy and confidentiality were not really of concern to the high net worth individual or the businessmen.

However, around the late 1990s we saw the economic development of the region and multinational companies moving into the region and setting up regional offices. Suddenly business people realised they needed to fly quickly to places like Bahrain or Qatar and come back on the same day because they have other meetings to attend. Of course, the petrodollars has meant that governments can spend a great deal on infrastructures and safety and security in the region. I would say that it is a combination of factors that has led to the growth of the industry.

BM. What effect did 9/11 have on business?
AB. The events of 9/11 actually increased the demand on business jets worldwide by almost 40% due to the safety issues. These are international figures, not MEBAA’s.

BM. What obstacles has MEBAA had to overcome since its conception?
AB. We have not really had that many problems because the Dubai government helped us in setting up a non-profit association. In the past 18 months MEBAA has come along very, very quickly and nicely. We became members of IBAC, the International Business Aviation Counsel, which holds 13 associations worldwide. All of the associations come together to discuss their needs, concerns, and challenges.

It’s also worth mentioning the advantages of becoming a MEBAA member. It is not only an umbrella where all these members come together to address concerns and issues, but it also communicate with the civil aviation authorities in the region about our concerns, about our needs, about any issues with any of our members. MEBAA also has purchasing power for bulk fuel or insurance, which cuts tremendously the costs for operators and service providers. Also, MEBAA shows the authorities the importance of a private jet customer because they are more likely to invest in a country. So MEBAA is a benefit to the countries in the region.

BM. You mentioned about buying fuel in bulk. How has the rise in crude oil prices affected members?
AB. It has been very minimal actually. If you tell a businessman or a customer that instead of paying US$40,000.00 a flight it has to be US$41,000 or US$41,500 the impact is really minimal. He will not cancel the flight because of US$1000 when he’s paying US$40,000. It definitely affects those flying on a commercial airline where previously you had to pay US$1000 and now it’s US$1300. So the impact is definitely higher but I cannot say that it has affected the demand on business jets.

BM. How seriously does MEBAA take the issue of security?
AB. Of course, it is one of our major issues. The members get together in meetings and discuss safety issues. We also pass our concerns to civil aviations and vice versa. It is one of, and probably the most important aspect, of the business as far as MEBAA is concerned.

BM. For those considering using a business jet, what would you say it offers customers benefits compared to flying with a commercial airline?
AB. Flying on a private jet you can arrive 10 minutes before departure and that’s very important. You don’t have to be at the airport 90 minutes or two hours beforehand. It’s just 10 or 15 minutes maximum and you are on board an aircraft that gives you privacy and confidentiality. You can also conduct several meetings in two or three countries all on the same day. You can also have your own guests on board and it’s your flight. You decide when; you decide how long; you decide your destination; you decide on the catering; you decide on the entertainment on board – the videos, the DVDs, the magazines on board. And, as I said, time is very important and that’s why 90% of our flights are for business purposes. It is becoming a more affordable form of transport, rather than a luxury.

BM. How big can the business jet industry get in the next few years and how much will the market be worth?
AB. The 2005 figures show US$500 million worth of business sold. Our estimates state that there will a 20 percent yearly increase so by 2010 or 2012 we are targeting a US$1 billion worth of private jet business being sold.

BM. And do you have any targets or goals for MEBAA over the next 12 to 18 months?
AB. We need to promote MEBAA as much as possible. We need to increase the number of members because the more members you have the more power this gives you he more power to push for certain rules or regulations. MEBAA also did its first show in was 2007, which was very successful because it was about promoting this industry. This year we have tripled the size of the MEBAA 2008 show – an important event worldwide with 150 companies participating and almost 60 aircraft on static demo. This shows the demand for this type of industry and I believe that we on track to hit our targets.

Ammar Balkar has spent his entire working career in aviation throughout the Middle East. Starting with Royal Jordanian Airlines, he has a wide range of experience in commercial airlines, corporate jets and helicopters. This experience includes assisting in the formation of a number of business jet start up companies, the most recent being Abu Dhabi’s Royal Jet where he was VP Sales & Marketing and sat on the Executive Management Board.