CEO Shane O'Hare talks about the complexities of the regional business aviation market.
President and CEO Shane O'Hare talks about the complexities of the regional business aviation market.
What position does Royal Jet currently hold within the regional aviation market?
The local market for private jet services is about US$500m a year: Royal Jet holds around 16% of the charter market. We have seen year-on-year growth in the order of 25% to 30% for the past three years, and there is currently no sign of that abating.
Between 2003 and 2007, Abu Dhabi topped the market with a compound annual growth rate in aircraft movements of 46%.
This was followed by Dubai at 38%. Royal Jet now flies nearly 260% more block hours than its nearest competitor in the region.
How long have you been in the region?
Royal Jet celebrates its fifth birthday this year. It is currently the third largest user of facilities at Abu Dhabi International Airport where we operate a dedicated fixed base operation and from where we flew to 350 destinations last year alone.
How have your strategies changed in the last five years?
We tailor our growth to match the demand on our services. This includes the management of aircraft for other clients which allows us to utilise their aircraft at peak demand. We are also the largest operator of BBJs (Boeing Business Jets) in the world with five currently in our fleet.
This reflects the high demand for large corporate jets in this part of the world.
When we started, we were serving the VVIP market (with clients including royalty), but as cost, security and privacy benefits have been realised by businesses and other organisations, we find that many of our clients come from these areas of the market too.
What can you offer your passengers and customers that your competition can't? How successful has your medical evacuation and repatriation service been in this respect?
Our marketing USP is based on the extremely high levels of service enjoyed by all our customers - a standard that other operators have difficulty in matching.
Add to that our large fleet of aircraft, (including the world's biggest fleet of BBJs), our FBO at Abu Dhabi and our ability to operate in other parts of the world, and it's not hard to see why the competition has difficulty meeting the service offerings we provide.
Royal Med was the first licensed, commercial aero medical evacuation services provider in the Middle East and has carried over 500 patients since it started.
Last year it flew patients on a record number of missions to centres of medical excellence throughout Europe, the Far East, Middle East, Indian Sub-continent and the USA - with London, Munich, Bonn and Singapore among the most popular destinations. In total, Royal Med transferred more than 150 patients during 2007 - an increase of 35% on 2006.
Traditionally it would be seen as something of a luxury. How cost effective can leasing a private business jet be?
Productivity is a critically important factor in the success of virtually all profit generating organizations.
If you take into consideration the fact that a chartered jet will offer virtually immediate departure (rather than having to wait in the departure lounge for nearly two hours), that the time during the flight can be usefully employed in privacy and confidence, that there is no waiting time for onward flights, and that there is no waiting for the return flight either, for a multi-sector multi-passenger business trip, the costs compare very favourably indeed.Add to that the efficiencies that can be gained by time savings, and it becomes a very attractive alternative.
For instance, using our twin-engined, six-seater Learjet 35s, charges will work out around US$2,850 per hour, which means that six business people could fly for a business meeting in Kuwait from Abu Dhabi, returning on the same day for around US$10,000 - very similar to the price of first class tickets on a scheduled airline.
How do you guarantee consistency in your quality offering?
The focus at Royal Jet is on creating a memorable customer experience that builds retention through outstanding service delivery. Although our people are recruited with the highest credentials, we continually retrain them in strategy, identity, in-flight and ground service and the personal interface with customers.
The idea is that we build a standard level of service and a standard on-board product which is instantly recognisable, yet we are careful not to train the individuality out of our people.
How do you market yourselves in an increasingly busy sector?
We find that because of the one-on-one relationships that we have with the majority of our clients, our best marketing comes from client referrals. This comes back yet again to the high levels of service that customers have come to expect from us.
We also, of course, talk to high net worth individuals and their travel planners on a constant ongoing basis, and manage our external relations to make sure that our visibility remains at the very top of the sectors in which we operate.
Why is the market for private aviation increasing and where do you see it going next?
There's an account surplus of around US$250bn in the local economy, partly as a result of surging oil prices. This has led to large amounts of liquidity which in turn has lifted the private jet market.
But the reasons go much further than this. Trade amongst GCC countries has doubled in the past four years as a result of customs union, and so executives of large corporations need to travel much more around their various bases in the Middle East.
Congestion is another major problem. Private jet services can take you to where you want when you want.
A growing number of secondary airports in less populated areas are also now available in the region, making travel much easier even to remote areas.
Privacy is another factor. Corporate jet travel offers privacy and confidentiality, which is a high priority for many executives in the Gulf; and with the influx of western companies, such as US and European groups, to the Gulf, there are more organisations that offer corporate jet service for their executives.
An increasing region-wide realisation of the cost-effectiveness of private jet travel is fuelling sector growth. Our research points to a 40% annual increase in the Middle East's business aviation sector for the coming five years with Saudi Arabia and the UAE driving the momentum.
Saudi Arabia is currently leading the surge but the UAE is catching up fast. In addition, the emerging markets of India and China will record similar growth rates and given the positioning of the Middle East between these markets and Europe, it is well placed to serve their growing requirements.
Do you have any ambitions for the group?
Royal Jet's five-year plan envisages a fleet of more than 20 aircraft - up from the current 12 - with expansion mainly centred on large-to-mid-range capacity airliners.