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Middle East Business Aviation hails booming market but IATA cautious
As market appears to soar in the region, many believe industry is facing its biggest crisis.
- By Natasha Marrian, Staff Reporter
- Published: 23:30 November 21, 2008
- Gulf visitors get a close look at a Learjet at the Middle East Business Aviation (MEBA) Exhibition in Dubai on Tuesday.
- Image Credit: EPA
Dubai: As the Middle East Business Aviation closed on a high note last week with organisers announcing deals worth over $1.5 billion (Dh5.5 billion), International Air Transport Association (IATA) chief executive Giovanni Bisignani said the aviation industry was in crisis and urgent action was needed to secure its future, financially and environmentally.
Bisignani was speaking on the state of the industry at the European Aviation Summit in Bordeaux.
"For airlines 2008 has been extraordinary. For the first seven months we had a cost crisis with skyrocketing fuel prices," he said.
"At our annual general meeting in June $135 per barrel oil risked adding $99 billion to industry costs over the following 12 months."
For IATA's European member's passenger traffic had plunged by 0.5 per cent, its worse performance since the SARS crisis in 2002. In the Middle East airlines were forced to increase fuel surcharges to keep up with the ever-increasing oil prices.
Companies bust
Despite the recent drop in fuel prices, large Middle Eastern operators such as Emirates have reported a dramatic drop in their profits.
"This year airlines will lose around $5 billion," Bisignani said. "Already at least 30 airlines have gone bust, more than after September 11. We are in a crisis that is highlighting the need for urgent action to secure a sustainable future - both financially and environmentally."
Business jet solutions company Airbiz, however said market indicators continued to trend positive in the Middle East.
"Major long-term business jet market indicators trend positive in the Middle East," said Airbiz director and partner Aubert Fernandes.
"Orders for new aircraft from the Middle East are higher and used aircraft sales are higher particularly with good deals available from the US and Europe." He added that business aviation in the Middle East was still in its infancy compared to the West.
Airbiz showcased its Hawker 850 XP at MEBA 2008, hoping to sell the April 2008 model at a price of $13.9 million.
"With changes in demographics expected due to the three palm projects... and with major up-market developments in Abu Dhabi and other countries in the Middle East," he said. He was optimistic about long trends in the Middle Eastern market.
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