The economic impact of the Covid-19 coronavirus outbreak could see some business jet companies go out of business and will likely lead to an increase in second-hand private jets coming on to the market, industry experts said.
Ali Ahmed Alnaqbi, founding and executive chairman of the Middle East and North Africa Business Aviation Association (MEBAA), told Arabian Business in an interview that business for corporate jet companies had initially been up, due to people flying back to their home bases, but now almost all private jets in the region are grounded.
As a result, he believes it is likely some of his members would not be able to survive the economic impact of the Covid-19 coronavirus outbreak.
“Honestly speaking, sadly yes, you will not be able to continue support without income. It all depends where you are geographically. A lot of governments have created a supportive budget for the private sector and the government sector. This is going to help,” he said.
“Unfortunately, we don’t want to see that, but we have seen companies let employees go on leave and some of them have been let go.”
The UAE has rolled out a $34 billion stimulus package to fend off the impact of the coronavirus. The Dubai Health Authority (DHA) on Monday confirmed 41 new cases of the Covid-19 virus in the UAE, bringing the country’s total to 611.
Mohammed Al Husary, executive president and owner of UAS International Trip Support, a Dubai-based company which offers global support for heads of state, VVIPs and business jet operators when they fly, agreed that the industry had seen an impact, but said the worst was not yet over.
“To be honest with you, up until the beginning of March the situation has been really normal, seemed like last year, because the shut down and ban on travel had not taken wide effect,” he said.
“But, as of the 15th of March we [noticed] a bit of a decline in the commercial and the VIP operations. The decline we’re talking about is not as huge as people might expect, because up until this moment, there are still some evacuation flights happening…I think the biggest impact is yet to materialise. I think this will materialise probably towards the beginning of April.”
When asked by Arabian Business if the companies going under would lead to an influx of private jets coming on to the second-hand market in the Middle East, Alnaqbi agreed.
“Yes, I think that’s going to happen,” he said, “but the secondary market means going back to the banks [as] most of [private jets] are financed”.
In December, before the full impact of Covid-19 was felt, Alnaqbi was buoyant about the future of the industry.
“The air traffic in Dubai is currently around 15,000 movements, and this is expected to double to at least 30,000 due to the event,” he told Arabian Aerospace, adding that the UAE accounted for a quarter of the almost 600 aircraft registered in the Middle East.