One of the biggest challenges to the business aviation market in the UAE and the larger Middle East is the so-called "grey market" which has eaten into at least 20 to 25 per cent of tbusiness aviation operations, according to a senior industry official.
"Around 20-25 per cent of the total business aviation market in the Middle East is currently accounted for by illegal operators [grey market companies]," Ali Ahmad Al Naqbi, founding chairman of Middle East Business Aviation Association (Mebaa), said.
"And as the number of aircraft grows, this market will also grow if we don't have proper procedures in place soon enough."
In the grey market, private aircraft owners without an air operator's certificate (AOC) conduct illegal charter flights, thereby making private jets available to unlicensed brokers.
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Drawing comparisons between the hourly rates charged by organised and unorganised segments, Al Naqbi said that if a company like Royal Jet, for instance, leases a Boeing Business Jet for $20,000-$25,000 per hour (Dh73,460-Dh91,825), the grey market will offer it for around $15,000 per hour.
"That's how bad it is," he told Gulf News.
"This [parallel] market is growing like a disease and it might really affect negatively the growth of business aviation as a whole in this region as there are no proper procedures in place. It can result into something quite disastrous."
Virtually no controls
Drawing parallels to other global markets, Al Naqbi said while in India almost all business aviation players today operate illegally, in Moscow the number is as high as 70 per cent.
"Our peer association in India is struggling as they are unable to control it," he said, adding that in a market like China, on the other hand, there are "no rules at all".
Further afield, illegal operations "almost killed" the market in the United States and has harmed the market immensely in Europe, according to Al Naqbi.
"And we don't want that to happen to us. Mebaa is trying to learn from the experiences of the European and US markets — which is where it all really started," he said.
"The United States, however, managed to control it to a great extent by issuing educational programmes on the subject and raising awareness."
Mebaa's European counterpart, the European Business Aviation Association (Ebaa) is working to strike fear in the hearts of those who damage the legal market by operating potentially unsafe flights, Ebaa's President Brian Humphries, reportedly said earlier this month.
Mebaa is urging every-body in this region — companies, authorities and airports — to cooperate in the fight to eliminate the practice.
"From our end, we are trying to raise awareness to educate not only the operators or the brokers but also the users of aircraft," he said.
He added that Mebaa is in talks with bodies such as GCAA (General Civil Aviation Authority), airports and operators to put checks in place.
"It is not so simple though. The illegal operation is a very easy way to make money for such companies. This segment of the market thus needs to be tackled immediately," a worried Al Naqbi said.
"But we as an association are working very closely with the authorities to try to put in place procedures to eliminate this practice."
The business aviation market in the Middle East is forecast to grow to over $1 billion ten years from now, from $500 million now, with a total of 1,300 business jets in operation, according to Mebaa estimates. And the growing threat of illegal operations is sparking fears that it could slow down this growth.
"Business aviation as a market in this region is still in its nascent stages. It has just about started to take off and we have a long way to go," Al Naqbi said.