Luxury charter-flight operator Royal Jet expects to turn a profit this year, despite a slowdown in business, because of the downturn in economic activity.
“We had a slowdown in charter flights this year and this is to be expected,” said Patrick Gordon, Royal Jet’s chief executive, at the Abu Dhabi Air Expo. “I think the slowdown is affecting everybody, it is all the customers that we have, including high networth individuals.”
But the head of the Abu Dhabi company asserted the profitability of his company despite the outlook. “Check the books. We were profitable last year and this year we expect to be profitable again. But we are starting off slower this year,” he said.
For the first time since 2009, the corporate jets business is seeing a slowdown because of falling commodity prices that is weakening demand in emerging markets for business travel.
In its annual survey, Honeywell International, the maker of engines for business jets, said that a weaker economy in Russia, Brazil, China and the political conflicts in the Middle East is affecting business travel this year.
To mitigate the tapering in business jet travel, which can sometimes be affected by seasonal factors, Royal Jet wants to focus on developing “mid-range, steady-income, revenue-producing projects”, said Mr Gordon.
The company, jointly owned by Abu Dhabi Aviation and the Presidential Flight Authority, started a contract for the UAE military on March 5 to provide all flight clearances, flight plans, crew and fuel purchases.
“It’s not a gigantic contract, but it is a nice, steady contract to fill the middle range,” said Mr Gordon. “There are talks for similar contracts for non-government entities,” he added.
The company also expects its medical evacuation services to grow by about 20 per cent this year.
In terms of its fleet-renewal programme, Royal Jet has taken delivery of two Boeing Business Jets and Lufthansa is working on their interiors. The first delivery will be in September and the other in October, said Mr Gordon.
Since 2014, Royal Jet has been in the middle of a US$700 million renewal programme, so far using $200m to purchase five aircraft.
Mr Gordon told The National in November that the goal is to have a fleet of 20 jets by 2020.
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