FT Business Industry News - Middle East Aerospace & Defense Market - 17th of June 2010

The aviation industry in the Gulf Co-operation Council (GCC) appears to be booming, especially if one looks at the growth of commercial airlines in the region. Despite the crises that have impacted the international aviation sector, the region's airlines have remained in relatively good shape.

But this part of the industry offers few opportunities for investors. This contrasts with the business aviation sector. According to one of the region's business aviation specialists, Karim Hijazi, managing director of Air Synapsis, there is a great opportunity for an investor to establish a "business shuttle service" that links the region's six capitals, each of which are within one-and- a-half hours flight of each other. He emphasises that the opportunity lies in the corporate market, not in the VIP one.

So while the business aviation sector in Europe and the US is 'saturated', there is good growth potential in the GCC.

Dubai is by far the busiest location for business jets, playing host to 36.4% of the business aviation traffic. Riyadh is well behind at 12.3%, followed by Beirut at 8.7%.

Mr Hijazi pointed out that by using a corporate jet, company personnel can have greater flexibility in their travel arrangements, complete passport formalities more easily and use their time more efficiently.

It would cost $2500 per hour to hire a plane to fly from Dubai to Riyadh . For, say, eight people, the whole journey might cost $10,000 . Commuters can save a whole working day as a result of flying by business jet, with the overall cost being no more expensive than using a scheduled flight, even including hotels.

Middle East Corporate travel: business case & opportunities

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