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Top Charter Trends in the Middle East

The Middle Eastern Market has been experiencing slow, inconsistent growth over the last 12 months, according to statistical analysis from Avinode, the world’s largest marketplace for air charter. The inconsistency in demand appears to be due, for the most part, to seasonal volatility, which manifests as rapid demand fluctuations throughout the year.
- We have seen slow steady growth in the region punctuated by large bursts of demand activity around the holidays,” says Magnus Henriksson, Business Manager for Avinode Business Intelligence.

- The largest of these spikes, by far, is the October request surge that precedes the Hajj. “

In addition to seasonal demand fluctuations this year has also been host to a great deal of unusual activity in the region.

- We saw a burst of demand early in the year, during the Arab Spring, ”says Alan Peaford, editor-in-chief of Arabian Aerospace, “Afterwards, there was almost a total stop, apart from at peak periods.”

Throughout the Arab Spring period, Avinode demand statistics indicated extremely localized increases in demand, followed by a marked drop in traffic in and around the effected areas. Since then, however, demand appears to have normalized in most parts of the region, and Avinode is seeing a resurgence of historical trends.

Among those historical trends is the striking dominance of heavy jets in the market. The current ratio of heavy to mid-size jets in Avinode demand statistics is approximately 60 to 30, with little to no light jet representation in the region. This, however, is poised to change according to Peaford.

- There is a growing amount of business happening within the region,” says Peaford.

- There’s a lot of business, for example, between Turkey and Egypt and their growing manufacturing businesses. These are just couple of hours flight. These types of missions are far more practical with light jets, but it will take some time for this market to grow. We’re currently projecting about a five-year growth cycle for the regional light jet market.”

Currently, however, the market is seeing mostly long-haul traffic. According to Peaford, there are a large number of business people who come into the region from China, stop over in the United Arab Emirates for business, and then continue on to Africa. Avinode’s internal figures also show a lot of traffic coming into the region from Russia.

Within the region Avinode statistics show that the United Arab Emirates is the dominant market, followed by Saudi Arabia, and then Lebanon. According to Avinode member company reports, however, this appears to be somewhat inaccurate, as Saudi Arabia is considered to be the dominant market by industry insiders. The likely culprit for this discrepancy is the prevalence of grey charter in Saudi Arabia.

- Grey charter in Saudi is a problem,” explains Peaford,

- But GACA, the General Authority of Civil Aviation in Saudi Arabia, is trying to raise awareness and educate operators, to help people understand the difference between legal and illegal charter flights.”

Another reason that Saudi Arabia may not be showing itself as the regional powerhouse quite yet is that it is an incredibly controlled market.

- There are a lot of private owners in country, so charter has not been as popular until recently,” says Peaford.

- However, it’s beginning to change. NetJets had a fractional program in the country until recently and relative newcomer, Saudia Private Aviation, the charter arm of Saudi Arabian Airlines, is looking strong.”

Saudi Arabia is not the only market that is poised to grow in coming years.

- Qatar and Kuwait are beginning to grow into very interesting markets,” says Peaford, “and as Iraq and Libya begin to open up again I think we will see them become large markets for charter. I also believe that we’ll begin to see increasing activity coming into the region from Kazakhstan and Uzbekistan as business between the region and the former Soviet states continues to grow.”