Private Jets in Beirut: A Mirage of Prosperity
By: Hassan Chakrani
Published Friday, August 10, 2012
Passing Beirut Airport, something was missing. The small luxury jets, usually seen parked near the large commercial airplanes, were nowhere to be seen.
“The jets are on leave with their owners, the politicians and men of influence,” according to an observer of civil aviation affairs in Lebanon.
Despite all the potential Lebanon enjoys in terms of transport expertise and its geographical location, it has not taken advantage of a private aviation boom around the world, particularly in the Middle East and North Africa (MENA) region.
During his visit to Lebanon at the end of 2011, chairman of the Middle East Business Aviation Association (MEBAA) Ali al-Naqbi told Al-Akhbar that “the problem of private aviation in Lebanon is its illegal side.”
“This is due to politics. Those who own the jets have tremendous power,” he said
On top of the political control, the sector is stifled by lack of organization and the absence of transparent regulation of the workings of companies.
For example, an international private aviation company, whose administration is based in Beirut, is in the process of purchasing seven new jets. “But we will park the planes in Germany. We cannot work in a politicized environment steered towards particular interests in the Beirut airport,” a manager in the company states.
Growth in this sector could be a major opportunity to generate new jobs and establish Lebanon as a vital aviation hub in the region. The country could use some of the hidden potential to compensate for the losses caused by competition with gigantic commercial companies, especially from the Arab gulf region.
Lebanon is located midway between various business capitals in the MENA region and Europe.
Its geographical advantage means it could become a pit stop for refueling, maintenance, and various land services. Beirut could become a magnet for large companies, since small and luxury jets cannot fly as far as their larger counterparts.
Lebanon should learn from the experience of Portugal, home of NetJets, one of the biggest private air transport companies in the world. It chose its base in this small country located west of the Iberian peninsula and not Charles de Gaulle Airport in Paris.
“Private aviation companies - and their clients - are attracted to less busy airports. A country such as Lebanon which has a limited number of runways, would be the first choice for private jets if authorities begin to employ the existing potential,” the civil aviation expert explains.
This geostrategic feature is not currently being harnessed. Out of 10 companies registered in the Directorate for Civil Aviation, none are private aviation companies that actually work in Lebanon. Those who charter private flights for businessmen are directly controlled by politicians and influential people.
This means that Lebanon is losing a rich opportunity, which might be exploited by Turkey or Jordan, for example. The coming period is expected to witness a sizeable boom in private civil aviation in the region.
According to the latest report by the company Bombardier, the civil aviation sector is expected to flourish in the near future, after years of stagnation. Those who can exploit it, will do well.
“Private jet sales will be back to sustainable levels by the beginning of 2013,” says the pioneering Canadian company. In 2011, its share for purchase orders out of the global total reached 45 percent.
“We believe that the long-term market drivers of growth for the business jet industry remain solid. These market drivers include: wealth creation, increasing penetration in high growth economies, globalization of trade, replacement demand, and market accessibility,” the company says.
The company projects that private jets sold and delivered in the next 20 years (2012-2031) will reach 24 thousand aircraft, with a total worth of around $648 million. In the same period it also expects the global size of the fleet to reach around 31,500 private jets. (After deducting the number of planes retired in the same period).
In the Middle East the total number of jets to be delivered in the next decade will be 410. Between 2022 and 2031, the region will further receive 775 new planes. The growth in the industry in obvious.
According to Naqbi, the top Arab official in the private aviation industry, the movement of private jets (takeoff and landing) in the region will increase to 160 thousand by 2015. But Lebanon’s share does not exceed 10 percent.
15,200 was the global total number of private jets at the end of 2011. It is expected to grow by a compound annual growth rate (CAGR) of 3.7 percent in the next 20 years.
85 percent is the global ratio for orders from previous owners. A high percentage of the world’s 1,226 billionaires own a private plane.
27 million dollars is the average price of a single private jet, according to Bombardier’s projections for the 2012-2031 period.
Why Private Jets
What are the features of private jets and business jet services?
Bombardier says the sector provides business travellers with “speed, flexibility, safety, and cost-effectiveness.”
There are also other advantages, such as scheduling flights according to need, capacity to continue working inside the airplane freely and privately due to all the available amenities, and the ability to reach airports close to company headquarters without need for travel to an international airport, then a local one, and then taking a car [and then walking from the garage and taking the elevator].
This article is an edited translation from the Arabic Edition.