As well as banning ‘Part 91’ private aircraft operations in Saudi Arabia, the country’s General Authority for Civil Aviation (GACA) has also issued a directive that all aircraft registered elsewhere be put on a Saudi AOC, in an apparent move to combat the gray charter market, according to NasJet CEO, Ghassan Hamdan.
“GACA has issued new regulations which require all aircraft owners based in Saudi Arabia, regardless of the aircraft state of registry, to be added on to a commercial or private AOC. Those who do not comply will suffer the consequences of having their annual landing permit in Saudi Arabia [withdrawn],” he said.
Hamdan expects this to lead to new aircraft moving on to the company’s management books. “We are noticing an upward trend of individual aircraft owners adding their aircraft under our NasJet management program, with three new additions this year. We are expecting four more over the course of next year,” he said.
The new GACA regulations stipulate that aircraft owners in Saudi Arabia should have submitted a comprehensive plan by September 1, 2016, stating their decision to operate their aircraft on either a private or a commercial AOC, NasJet said in a press release issued August 22.
“Failure to comply with the new rules and regulations may result in severe consequences, including restrictions on annual landing permit renewals or refusal to provide a one-time landing permit, which can lead to the grounding of the owners’ planes,” it said.
Low oil prices and falling foreign exchange reserves leading to unprecedented sovereign bond issuance have impacted business and corporate aviation in the kingdom. “We are noticing a slight downward trend in business and corporate aviation in the Middle East region due to the current state of the economy,” he said.
“However, the aircraft under the NasJet management program continue to increase and build in numbers and variety. NasJet is also the first to offer the aviation community in Saudi Arabia our AOC solutions which allow owners to add their aircraft onto a GACA Part 125 (Private AOC) or GACA Part 121SU (Commercial AOC) to meet the new GACA regulations that have come into effect this year.”
NasJet remains the largest private aviation operator and management company in the kingdom. “The primary driver for aircraft owners adding their aircraft under our management program is the AOC solutions and the ability to reduce costs by offering charter solutions. Furthermore, NasJet can offer various backup solutions from our existing fleet of aircraft under management which is an added benefit for our aircraft owners,” he said.
By putting their aircraft on its AOC, NasJet claims to offer exclusive discounts on fuel, handling, and insurance, which could help reduce owners’ costs by up to 25 percent.
Jordanian Hamdan, a veteran of the company who originally joined the entity that became an affiliate of U.S.fractional-ownership provider NetJets in 1999, told AIN in 2014 that he believed the gray market amounted to between 20 and 40 percent of all charters in the country. Lack of statistics makes it difficult to compare those figures to today’s figures.
“We have a total of 37 aircraft under management. NasJet currently operates a variety of aircraft types including a Boeing Business Jet, Airbus Corporate Jets, Gulfstream GV, G450, GIV–SP, G300, Legacy 600, Falcon 900B, Hawker 750 and Citation Excel aircraft,” Hamdan told AIN.
All regional operators are reporting falls in fleet size, and NasJet is no exception. NasJet officials said at the last MEBAA show two years ago that its fleet size stood at 67 aircraft.
“We also serve several layers of the aviation community in the Middle East, including the government and private sectors, HNWIs (high net worth individuals), and corporate companies,” said Hamdan, who is understood not to be related to former CEO of NAS Holding, NasJet’s parent company, Sulaiman Al Hamdan. The latter is now head of GACA and Saudi minister of transport.
NasJet has always been keen to manage costs. Speaking to AIN at MEBAA 2014, a company official said: “There are [a number of] challenges faced by the industry in this region. Managing direct operating costs is a particular challenge for the Middle East, as regional MRO facilities are still at an early development stage. As an industry we are still heavily reliant on services outside of the region, which increases the number of non-revenue generating flights.”
Saudi airports are undergoing privatization, but plans to accommodate business aviation outside the four international airports at Riyadh, Jeddah, Dammam and Medina, the only facilities where FBOs exist, are unclear. NasJet has an FBO in Riyadh with international joint-venture partner ExecuJet, with further expansion planned.
MEBAA 2016 marks the completion of three years of joint FBO operations in Riyadh with ExecuJet.
Hamdan said NasJet has also gained IS–BAO (International Standard for Business Aircraft Operations) accreditation from IBAC during 2016. “[The company] is very proud of this…as it illustrates our dedication to safety in the region.”