Dubai: Private jet manufacturers and operators are cautiously optimistic as oil prices continue their six month decline.
Many in the private jet market believe they are facing a “double-edged” sword as operating costs are cut in line with falling oil prices but wary of what the drop means for the global economy. Prices have dropped from above $115 a barrel for global benchmark Brent crude to around $67, as of Monday.
“It’s slightly easier for us to operate at the moment but falling oil prices sometimes affects demand worldwide,” said David Edwards, Executive Vice President at Qatar Airways’ corporate jet division Qatar Executive, in an interview.
“It’s a double edges sword all the time these things. Just because you’re saving on the cost of fuel there is a still a fall in demand because people aren’t travelling as much because there is less money in the markets,” he said speaking to Gulf News at the Middle East Business Aviation show in Dubai.
Many private jet and commercial airliners claim oil accounts for between 30 and 40 per cent of their total operating costs.
Shaikh Ahmed, chairman and CEO of Emirates airline and Group, told reporters after he opened the show on Monday the Emirates is “so happy seeing that prices are going down.”
Earlier in the day, Outgoing Boeing Business Jet President Captain Steve Taylor said he was yet to see a connection between sales discussions and oil prices but still acknowledged the “source of income” for “a lot of the customers” in the Middle East rely on oil revenues.
The Middle East has accounted for 30 per cent of the 13 business jets it has sold so far this year.
French manufacturer Dassault, which 20 per cent of purchases of its Falcon 5X models have been by Middle East customers, is uncertain how the oil price will affect the market.
“It’s difficult to tell … overall we see a great potential here,” said Olivier Villa, senior vice president of civil aircraft.
Others are more optimistic, Saad Saleh Al Azwari, chief executive of Saudi Arabian-based private jet manager NasJet, does not think the firm will be affected because its clients “are not only oil dependent.”
Steve Hartley, executive director at Empire Aviation Group (EAG), and Patrick Gordon, acting president and chief executive of Royal Jet, both separately said their two UAE-based companies would not be affected by the oil price decline.
Like Al Azwari, Hartley said EAG was diversified away from oil dependent customers while Gordon suggested its high net worth clients are unlikely to alter their preference of travel in lieu of declining oil prices.
