Middle Eastern promise
Posted Date: 01/09/2007
Issue: Executive & VIP Aviation International September 2007
Publication: Executive & VIP Aviation International
Arab Wings is a Jordanian charter operator with a royal pedigree. Having undergone a shift in ownership, the buoyant market has placed Arab Wings firmly on a growth curve. Jo Murray talks to Sameer Hdairis, General Manager of the Jordanian operator
At 32 years of age, Arab Wings has seen the best and worst of times experienced by the executive aviation business. Born in 1975 as a fully owned subsidiary of Royal Jordanian Airline, Arab Wings provided VIPs in the Middle East an alternative to airline travel. “Arab Wings was the first and only charter company to provide this service,” Sameer Hdairis, General Manager of Arab Wings, reminds us. So what prompted this airline to pursue the private charter route? “The airline had its own training facility, simulators, its own catering division and a number of other subsidiaries,” comments Hdairis. “There was demand for VIP charter flights, which did not exist in the region at that time; they were only available to the region from Europe.” The airline’s aim was to complement scheduled airline operations with VIP charter flights; not to feed its hub with first class passengers through a regional VIP network in the way we are now seeing developed in the European region. “We grew significantly in the 1980s but, in the 1990s, we started to stagnate. In early 2004, Royal Jordanian Airline took the decision to sell the company,” Hdairis explains. In 2005, a group of Jordanian investors took over the company and left Royal Jordanian with a 25% stake. Then, in early 2007, Arab Wings’ largest shareholder – who also owned a majority share in Royal Jordanian Air Academy (RJAA) – augmented his holding so that RJAA became the sole owner of Arab Wings. The previous stakeholders in Arab Wings thereby became new shareholders in RJAA. “The shares belonging to Royal Jordanian Airline were therefore diluted to almost 14% and RJAA became our holding company,” concludes Hdairis.
Most of Arab Wings’ operations are within the region, serving the Gulf, Saudi Arabia, Oman and Cairo. But the charter operator also serves Europe; a market it is visiting more regularly as growth takes hold. Also, operations into North Africa through leasing arrangements are firmly on the agenda.
The shape of the fleet
Towards the end of the 1990s, as decline took hold – both in terms of assets and services – Arab Wings owned only two ageing aircraft and there were few prospects for fleet renewal. These aircraft suffered from a limited availability of support and the charter company laboured under Royal Jordanian Airline’s decision not to invest further in fleet.
Under the new ownership arrangements, only the charter operator’s name and its air operators’ certificate were transferred; not the ageing fleet. In 2005, two aircraft were acquired. The first was a new Citation XLS and the other was a King Air B200 turboprop. In 2006 a Challenger 604, built in 1998, was added and then a Hawker 800XP, built in 2001, joined the fleet. Later that year, Arab Wings sold the Citation XLS and replaced it with another Hawker 800XP, built in 2001. “The reason for the sale of the Citation XLS was the lack of necessary range and also our desire for commonality of pilots, training and maintenance. It was easier for us if Arab Wings had two aircraft of the same type,” explains Hdairis. With a fleet of four relatively new aircraft operating from Arab Wings’ Amman and Dubai bases, Arab Wings felt confident enough to buy a Beechcraft 1900 turboprop aircraft, built in 2000 and leased to a Swiss company for operations in North Africa. When asked whether acquiring and leasing out aircraft is a strategy Arab Wings would pursue further, Hdairis responds: “Yes, we would like to add to the lease business. This is a healthy market in which to do this.”
Into Iraq
Beyond the exploration of North Africa through lease arrangements, Arab Wings is also venturing into a war zone by undertaking private charter flights into Iraq.
“Since we are geographically very close to Iraq and a lot of Iraqis reside in Jordan, we are in a position to offer this service. There are also a lot of international servicemen – such as those from the United Nations – based in Jordan who wish to travel between Jordan and Iraq,” explans Hdairis. “We also undertake medical evacuation using turboprop aircraft out of Baghdad or Basra, for example. We use the Hawker aircraft to fly into Erbil and Al-Sulaymaniyah in northern Iraq.” Hdairis is sanguine about flying into Iraq. Of course such manoeuvres require coordination with the military but now Hdairis simply describes Arab Wings as “a regular operator to that area”. He has built up a portfolio of clients who wish to travel to Iraq on a regular basis. These are not just personnel from international bodies, but also oil and gas company executives. Arab Wings also flies patients from hospitals in Iraq (which are under contract with companies operating in Iraq) to be treated at medical centres in Jordan.
Sitting on a growth curve
So what is driving growth for Arab Wings and from where does this charter operator get its confidence to add fleet? “The overall driving factor is the rapid increase in business in the region. People here can afford more luxury now; and the issues related to travelling with airlines are causing more people to choose to travel privately,” he responds.
But are there limiting factors that may impact on this growth? Are the Middle East and Gulf regions sufficiently equipped with services to accommodate this kind of growth going forward? “In some areas there are handling monopolies,” comments Hdairis, adding that this dearth of competition creates very high pricing. Hopefully, liberalisation of these markets will improve handling charges for operators, he adds. Also, the scarcity of high quality aircraft maintenance services in the region is a concern for Hdairis. Cause for optimismDespite these two negative issues, Hdairis is optimistic about Arab Wings’ future growth potential. “We need to watch the market and evaluate the way in which demand increases,” he says. “We should be in a position to add aircraft steadily – not very quickly. We would like to diversify our services.” Next on the agenda for Arab Wings is aircraft management on behalf of third parties. In fact the first Gulfstream is already lined up for management and Hdairis is confident this will be a further plank to the Arab Wings strategy.
