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Wednesday, 03 December 2008 02:54 UAE time

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Empire state

by This email address is being protected from spam bots, you need Javascript enabled to view it  on Sunday, 02 March 2008

Steve Hartley is surprisingly candid when comparing the Middle East's charter flights market with other regions.

The chief operating officer at Empire Aviation Group recalls a shareholder's "disgust" after chartering a business jet in Europe last year. Having invested in Empire, an asset management company that provides similar offerings, the stakeholder was unimpressed with the poor quality service outside the Middle East.

"Europe's market doesn't compare at all," Hartley says. "I'm not saying that none of the operators over there get it right, but those that do are few and far between.

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When you are in the same organisation for 30 years you become a narrow thinker. Your thought process doesn’t change much.

"We are spoilt here and the service levels are extremely high. The locals demand and expect it - if you don't deliver they won't come back to you.

Despite enduring a miserable flight, the shareholder considered it a positive experience. Following his return, he urged Empire's management to capitalise by establishing the company's services in Europe. But with the business launched just last year, the directors have other priorities to address before international expansion.

Nevertheless, Hartley insists opening offices outside this region is a long-term goal. "Europe is an opportunity we are looking at," he says. "The US is another we are thinking about in terms of expansion, although that would initially be a sales office. From an operational point of view, we expect to have a European presence in the next 12 to 18 months.

Expanding the company's presence across the Middle East is also on the agenda, according to Hartley. Empire's directors have held talks with businesses and individuals about launching asset management services beyond the UAE. Potential locations include Oman, Kuwait and Qatar, although there are no concrete plans in place. "Interestingly, we have had approaches from companies and individuals outside the UAE looking to do something in conjunction with ourselves in other Middle Eastern regions," Hartley says.

"We are looking at other regional offices outside the UAE." Hartley admits the regional and international rollout is a long-term strategy, with the directors currently focused on developing the fledgling company. Empire was registered on June 16 after management secured an Air Operator's Certificate within three weeks of applying.

Some three days later, the company sold its first aeroplane during the Paris Air Show, while management signed a deal to distribute Hawker Beechcraft jets across the Middle East. It then sold a further six aircraft at the show, capping a hectic opening month for the founders.

Aside from selling aeroplanes and providing charter services, Empire also maintains clients' private aircraft. "Businessmen that buy planes usually don't have the time and knowledge to look after or crew them," Hartley says. "We crew the plane and manage the maintenance for the client, so he can phone the offices and say ‘I need a flight next Thursday' and off he goes. When he's not using the plane we charter it out, which pays for his standing costs.

Elsewhere, Empire's services include air ambulance, insurance and financing. The latter is a US$100 million fund, which covers clients' aircraft acquisitions.

Meanwhile, the insurance side is available to businessmen with private jets. So far, Empire has provided insurance for five to six aeroplanes since the policy was introduced.

According to Hartley, branching out from just air charter gives Empire the edge over competitors operating in the Middle East. He insists the business is unique, with no other company involved in asset management. "Buying aeroplanes, putting them out to work and hoping the income funds the cost of that acquisition is how some aircraft owners deal with air charter operators," he says.

"But we are slightly different because we don't want to be judge and jury - we want to sell aeroplanes and manage those assets on behalf of the owners. Companies tend to focus on air taxi or charter, with aircraft owners expected to have revenue streams that cover their standing costs when they are not using the plane. We have a charter division but it's a different model to most other organisations. The majority here are just charter operators.

Empire's "unique" business model has helped lure financiers, with Zableel Investments and Dubai International Financial Centre Investments injecting capital last year. Hartley says both companies are keen to establish Empire as a regional, and then international, player within the coming years. The investors' capital has already aided Empire's development, with some 23 employees on board and three planes recently added to its growing fleet.


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