Story ID: 364
Mixed Bizav Picture Emerges from Saudi Arabia
By: Peter Shaw-Smith
Caption: While one business aviation market participant expressed optimism about Saudi Arabia, another said the kingdom is not doing as well as it should.
Word Count: 928
Uncertainty surrounding the progress of the Saudi business aviation market has continued since several prominent individuals were detained in the Ritz Carlton hotel in Riyadh in November 2017, resulting in restitution in funds to the Saudi government of more than $100 billion. AIN canvassed opinions from several players in the Middle East market to get a snapshot of the current situation, and a mixed picture emerged.

“We’re optimistic about the Saudi market due to a number of critical developments within the country,” Mohammed Al Husary—co-owner, founder, and executive president of UAS International Trip Support—told AIN. Referencing new online tourist visa availability, he said, “The ease with which tourists can now get visas to enter represents a remarkable step in the country’s move toward diversifying its economy and will inevitably lead to greater inclusion on the world stage.”

Reports of the impending creation of a new Saudi Airline, RIA, to be based in Jeddah, were also noteworthy. Al Husary said It is aiming to compete with Emirates globally, with the venture made possible by the government’s $30 billion investment and Vision 2030 strategy that could help liberalize and diversify the economy. This investment and strategy could pave the way for stability that outside actors would respond positively to, he added.

AIN understands that Saudi Arabia's General Authority of Civil Aviation (GACA) is eager to develop business aviation. This includes plans to add four dedicated business aviation airports, 11 private jet terminals/FBOs, and more than 400 helipads to the country's aviation infrastructure.

“Saudi Arabia is always threatening to do more, but still doesn’t do as much as its size would dictate normally; we’re not seeing huge amounts of activity in the kingdom,” Hamish Harding, chairman of Dubai-based Action Aviation, told AIN.

“I think it’s probably not as active as it should be. There are transactions going on. People are buying and selling jets there, but it’s not the booming market that it could be, in a sense, given its size and the benefits of having a business jet in a country like that.  Strange rules like you can’t keep a foreign-registered jet in Saudi Arabia for longer than 72 hours before the crew has to relocate to somewhere such as Dubai make no sense in a country trying to move forward internationally.”

The traditional Saudi preference for new aircraft over preowned depended more today on a budget than ever. “If you need to get direct to London, and you don’t have unlimited cash, then you’re going to want to go preowned,” Harding said. ”New aircraft that can go Riyadh-London are quite expensive.”

For Ahmad Abu Ghazaleh, general manager of Arab Wings in Jordan, leaner times were more noticeable after the Ritz Carlton incident, given the firm’s proximity to and reliance on the Saudi market. Until then, the buoyance of the market had been impressive.

“Remember that that boom time was interesting, but I think it’s less so now because Saudi Arabia has shut down,” he told AIN. “Qatar has its own government private jets; I guess it’s called Qatar Aviation. Saudi Arabia is thinking of doing its own state-type thing, similar to Qatar. It’s just the UAE—there’s nothing else happening other than that in the Gulf.

“After what happened with a lot of high-profile individuals going to the Ritz Carlton in 2017, and the airplanes being seized or people not wanting to show their wealth as much as they used to, from what I’ve heard from a lot of the manufacturers, they’re selling close to nothing in Saudi Arabia today.”

Arab Wings has regular flights to Saudi Arabia but did not have any Saudi clients. “In terms of visitors, they’re doing a lot of tourism right now,” he said. “The country’s opening up. For sure, there’ll be more activity in terms of people wanting to visit, in terms of business—with oil at the price it is, there’s a lot of movement—bankers, people wanting to set things up in Saudi Arabia. You’re going to have a lot of business jet movements. I’m only talking about actual business jets being managed inside Saudi Arabia.”

Four years ago, great enthusiasm existed from other Middle East locations for launching operations in Saudi Arabia, but delays have sometimes stymied those efforts. “There isn't enough structure in the market yet, economically, on one hand, and from a regulatory perspective on the other,” Holger Ostheimer, managing director of DC Aviation Al-Futtaim in Dubai, told AIN. “The group has been having these discussions with our likely Saudi partner for a number of years. The parties involved believe the time hasn't yet come to put that into operation.”

Ian Moore, Chief Commercial Officer, VistaJet, said the reluctance among prominent Saudis to be seen owning and operating business jets had played into VistaJet's hands at the four main international airports in the Kingdom.

“Our brand and what we stand for and the fact that we’re available to our customers all around the world means that Saudi businessmen aren’t just confined to their region,” he said. “There’s a lot of flying to Europe, and the U.S. That comment about the Saudis is pretty much emulated around the world. Owning an aircraft just doesn’t make a lot of sense. There was never a global solution like ours previously.”