Monday, December 15, 2014

Private jet operator NasJet warns over illegal charter practices in Middle East

NasJet, the largest private aviation firm in the Middle East, says that the grey market for the chartering of business aircraft is the greatest threat to its operations in the region.

“The main challenge for us is the grey market, or the illegal chartering of business aircraft,” said Saad Alazwari, the chief executive of NasJet. “If those businesses in the grey market were to apply for a license like us, they would not acquire a license.

“Their business is dangerous because the life of the passenger is not taken care [of], because the aircraft is not taken care of – because of poor regulation.”

The Middle East Business Aviation Association (Mebaa) said that private jets that operate without a licence constitute about 50 percent of total charter operations. While no major incident has occurred so far to highlight the risks of the grey market, Mebaa wants tougher measures imposed on the practice.

According to Mebaa the growth of the grey market is a result of passengers lured by the cheaper rates offered by unlicensed operators.

“They compete in price. The category of clients we have will not compromise their safety, but illegal charter operators still try to convince people to fly with them,” said Mr Alazwari.

Separately, he expects demand from its local Saudi Arabian market to be the main driver of growth next year, despite the falling price of oil, sales from which comprise about 90 percent of the kingdom’s revenues.

A study by Private Jet Charter, a business jet rental company in the UAE, showed that Arabian Gulf business travellers spend up to twice as long flying on private jets as their counterparts in Europe.

The study revealed that UAE business travellers using private jet services spent an average of 100 to 150 hours each year on the aircraft, while their Saudi counterparts flew for more than 200 hours annually.

Across the region, Mr Alazwari expects the relatively stable political climate in Egypt to reflect positively on business.

“We used to have very good business in Egypt. We lost this stream of revenue because of the revolution,” he said. “Now that Egypt is stabilizing, it will enhance our growth of business.”


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