JEDDAH — New research from Global Jet Capital, a provider of financing solutions for large-cabin, long-range private jets, revealed that 288 mid to heavy private jets were delivered to the Middle East between 2005 and 2014, with a combined value of over $14 billion.
Global Jet Capital said these aircraft typically cost between $25 million and $75 million each, and up to 80% of the funding used to purchase these is sourced through external financing.
The largest number of deliveries were to Turkey (79), followed by the UAE (61) and Saudi Arabia (52).
The aviation finance specialist, which recently agreed to purchase the aircraft lease and loan portfolio of GE Capital Corporate Aircraft in the Americas representing approximately $2.5 billion of net assets, has around $1 billion to lend to clients to purchase relevant business aircraft in the Middle East and elsewhere around the world.
Shawn Vick, Executive Director of Global Jet Capital, said: “Just over half of the fleet of mid to large private jets in the Middle East were delivered between 2005 and 2014, and many of these aircraft would have been purchased using some form of external financing.”
“We have a considerable amount of money to lend to clients wanting to purchase mid to large private jets, and the Middle East is an attractive market for us.”
Global Jet Capital, which was launched last year, is capitalized by three global investment firms – GSO Capital Partners, a Blackstone company in partnership with Franklin Square Capital Partners; The Carlyle Group; and AE Industrial Partners.
The company’s current management team and executive committee is composed of leaders from business jet manufacturers, maintenance and service providers and leading financial institutions who have served the private aircraft industry for a combined 200-plus years and have completed over 3,500 aircraft transactions.
After three years of record jetliner orders, planemakers are bracing for a slowdown in new commitments at the Dubai Airshow which opens on Sunday under the shadow of recently falling oil prices and conflicts in the Middle East.
Barring traditional show surprises, delegates attending the biennial Nov 8-12 event predicted a drop in major commercial order announcements as Gulf airlines take stock after expansion.
The aerospace industry is putting a brave face on the slowdown, saying the tally of more than 400 orders at the 2013 edition was never going to be repeatable. But analysts will be scanning the announcements for any evidence that the dip is more than a return to normality.
Aerospace investors are concerned that a glut of wide-body jets rolling off production lines towards the end of this decade could put pressure on aviation, just as doubts gather over the pace of economic activity.
“A lot of airlines have bought aircraft to capture the same growth,” said Ben Moores, senior analyst at IHS Aerospace, Defence & Security.
Boeing said on Saturday it remained confident about long-term jetliner demand, particularly in the Middle East which is expected to need more than 3,000 jets in 20 years.
Etihad Airways may emerge as the buyer of 10 777X jets listed anonymously on Boeing’s website, Gulf sources said, though an announcement may not happen at the show. Both companies declined comment.
The recent commercial order boom is expected to lead to deals putting parts manufacturing back into the UAE and India at the show. And in defense, at least four Gulf nations are negotiating new fighter purchases. — SG