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A recent report from Gama Aviation revealed the fast growth of flights emanating from emerging European economies has been the driving force behind the increase in European business flights over the past five years. Business Airport International spoke to Marwan Khalek, CEO of Gama Aviation, about what the results mean for the company.
Were you surprised by the results of the study? It was interesting to see the results reflect our own experience; over the past five years we have seen a significant increase in demand for our services, so we would imagine this appetite for business travel would translate into a broader trend in the industry. What is interesting is where this growth is coming from: markets such as Turkey and Russia, which are yet to reach maturity in business aviation terms, are seeing a huge increase in the number of daily business departures, whilst developed business aviation markets like Germany are taking advantage of the trading partnerships with growing countries such as Hungary and the Czech Republic, which is boosting the number of daily departures between these countries.
Why is Turkey playing such a big part in the growth of business aviation?
Turkey’s business aviation fleet has enjoyed strong growth in recent years, with 39 deliveries over the period 2010-2014. This has significantly boosted the overall fleet, which now stands at 154 aircraft. Furthermore, Turkey has significantly increased its trade with EU countries over the past decade, with the value of its exports to EU member states increasing by 66% since 2005 according to European Commission data. As Turkish companies grow and discover the benefits of business air travel, this is likely to fuel growth and develop the country’s business aviation market.
What are your predictions for future growth?
We expect to see continued growth in emerging European economies – notably in Eastern Europe.
How has the industry improved in promoting the benefits of business aviation and what impact has this had on growth?
I believe that in recent years business aircraft operators have successfully communicated the message that private air travel is a valuable business tool. The industry has been hindered by the image of business aircraft jetting millionaire playboys around the globe, although there has been a steady growth in the number of businesses chartering flights in recent years. Furthermore there is a significant pool of businesses across Europe – and indeed the world – yet to exploit the opportunities presented by business air travel, so we expect to see continued growth in years to come as the market experiences further consolidation and collaboration.
What else can be done to ensure the long-term health of the industry?
Business aviation in Europe is very fragmented with a significant proportion of operators currently comprising smaller, boutique businesses that have no real opportunities to grow, and this is hampering the long-term future of the industry. The global business aviation services market is currently undergoing a fundamental shift from the situation a decade ago when new entrants were able to carry out niche operations; fleet and private owners now want their aircraft to be managed by a well-run, efficient and successful company who, through economies of scale, can pass on major cost savings. This is why we expect the industry to continue to consolidate and, as a result, strengthen the proposition for both companies and clients.
Where is Gama Aviation seeing the most growth in its own operations?
We recently entered the Asian market with a joint venture with Hutchison Whampoa, undertaking management of two large aircraft in Hong Kong. As a developing business aviation market, Asia Pacific is currently showing strong signs of growth and we expect demand for our services to grow in the future.
How will you continue to grow and improve your business?
Having merged with Hangar8 at the turn of the year, we now operate over 145 aircraft located at 45 operating bases across five continents. We believe that this merger gave us the platform to offer a global service to our clients and we will continue to develop our fleet by undertaking significant contracts to broaden the depth and range of our service. Furthermore, the growth of our managed fleet has allowed us to commence work on renegotiating a number of contracts that will see us be able to pass on significant savings to our client base.
June 1, 2015