Growth spurt

Confident in its position as the market leader within the Middle East's business aviation sector, Royal Jet's CEO, Shane O’Hare reveals that the private jet operator remains open to establishing itself in new and emerging markets.

When you consider that the Middle East's business aviation industry is still in its infancy it is difficult to remain unimpressed by Royal Jet's somewhat ‘mature' balance sheet. As a business, the Abu Dhabi-based private jet operator has grown quickly.

It was profitable after only its second year of operation in 2005 and has since grown 20% year on year. In addition, despite the global aviation industry beginning to feel the impact of the economic downturn, 2008 saw the government-owned private jet operator achieve record profits.

Shane O'Hare is the man charged with the task of maintaining and developing Royal Jet's strong balance sheet.

"We have worked hard over a five year period to become a market leader in the Middle East," he explains. "We are also the leading brand in the region as far as private jets are concerned."

But the CEO is quick to add that every industry and every country is, in some way, going to be touched by the global economic downturn. "We are already seeing evidence of this across the board. The answer to what will happen next? Nobody quite knows to be honest. Over time, the next four or five months will give a much better indication of the effects of the downturn and the issues facing certain industries."

However O'Hare remains confident that the corporate travel industry will continue to grow.

"It needs to be remembered that in the Middle East there has been a general GDP running at 7-8%, while other global economies have been running at between 1-3%, so there is still very strong growth here and before this downturn occurred, there was significant demand over supply. The drop in demand for business jets has been more dramatic across the US and Europe."

The drop in demand is also due to other contributing factors. Although much of the industry's reversal of fortune is down to the economy, jet makers attribute loss of business to the unexpected public backlash that erupted after the chief executives of Ford Motor Co., Chrysler LLC and General Motors Corp. travelled in private jets last year to ask the US Congress for billions of dollars of economic aid.

Fortunately, Middle East executives continue to propel the demand for luxury corporate travel in the region and Royal Jet continues to build its global reputation with a fleet of Boeing Business Jets (BBJs).

The 737 jet provides a ‘flying office' for over 40 executives at one time, making it a more environmentally friendly way to use corporate jets. "There was a customer need in this part of the world for large VIP aircraft and Royal Jet believes exploiting larger business jets was a clear way to differentiate ourselves from other operators," O'Hare explains.

"We are the biggest operator of BBJs in the world. There is a fairly small but global market that requires frequent use of this type of aircraft, typically heads of state, specialised charter operations and government outings."

And the luxury provider has not ruled out adding larger jets to its fleet. "We always look at the options," O'Hare says, "and we do have a demand for larger VIP aircraft, but to be honest, there aren't many [aircraft] available globally and the demand is small, so for the moment the BBJ is seen as ideal for the requirements of that smaller market group."

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