Royal Jet's fortunes are back on the upswing, following steep declines experienced by every charter operator during the early stages of the Covid pandemic.
This summer, the Abu Dhabi-based charter operator has inducted two managed Boeing BBJs, adding to a fleet of eight such aircraft and two Bombardier Global 5000s, and has just completed a refit of an existing BBJ.
“We now have two BBJs under management, including a Russian-owned BBJ, plus the eight BBJs that we own and operate,” CEO Rob DiCastri told AIN. “Actually, you could say we have four under management because, two years ago, we had sold two of our aircraft, and leased them back from the buyer. We have four under management and six that we own.”
The Russian BBJ is registered in Bermuda and its owner has allowed Royal Jet to implement a long-contemplated plan to obtain a second air operator certificate by setting up a Bermuda-based subsidiary. The owner of the second recently added BBJ has not been disclosed.
DiCastri has looked on enviously at breakneck recent movement levels in Dubai, compared with the more conservative stance on access taken by the authorities in the UAE capital, Abu Dhabi.
From March to June of last year, Royal Jet saw business fall to about 10 percent of pre-Covid-19 levels.
“It went down to almost nothing because, of course, the airspace closed,” he said. “We were only doing a little bit of medevac, a couple of diplomatic flights here and there. That was it. In July, we hit about 25 percent. In August, we were about 50 percent because the Royal family started to travel a little bit more, government movements, and other heads of state. But then it stayed at 50 percent, until really early this year.” Since then, it’s been at 60 to 65 percent, but nothing like the current levels being seen in Dubai.
“A lot of what you see in Dubai is smaller aircraft. We are a BBJ operator. It's a different clientele. It's a different process for the royal family and the ministries, other heads of state, and the ultra-high-net-worth individuals, to come back to fly," added DiCastri. “It's coming back. It's better than the airlines for sure. But we're not at Dubai levels. I wish we were, but realistically we're at the 65 percent level right now, hoping to get to maybe 80 percent this summer, if people are traveling to their leisure destinations.”
Royal Jet saw record profitability from 2016 to 2019. "Now we're back in a profitable situation. Even at 50 percent, we were back to profitability," he said.
Speaking about the latest BBJ refurbishment, DiCastri. said, "We tried to spend the minimum on it, but get the biggest bang for our buck. It was just one aircraft. We weren't going to do two or three at a time. We will refresh the fleet over time.
"We'll probably bring in one or two preowned aircraft in the 10-year bracket or [similar]. We're talking about bringing in new aircraft, but not too many at the same time. It'll be one or two aircraft. Then, after a few years, let's say one or two more aircraft; that way, we can handle the financials, where we have enough cash flow to cover the costs. That's the focus: to refresh and renew, but over time.
“I think realistically, by the end of this year, we'll make a decision and place an order of some kind. I can't say how big or small it might be, but something to make sure that a few years from now we have something fresh."