A combination of rising demand for long-haul, leisure travel and easier access to business aviation through new business-to-consumer (B2C) technology are driving growth in the Middle East market, according to online charter marketplace Avinode.
Data from the Avinode Marketplace over the past 12 months shows what the company described as “a healthy increase” in both domestic and international flight requests for the Middle East region. “The market is being led by confident leisure and long-haul family travel, which is also driving an increase in heavy jets and VIP/ultra-long-range aircraft,” commented Avinode managing director Oliver King.
According to the Sweden-based group, charter brokers are making greater use of B2C technology, expanding their business with mobile and web apps. “In October, Avinode set a new record in powering 2.3 million end-client searches for members using Avinode Web Apps and APIs,” said King. “While uptake has been slower than in the U.S. and Europe, the industry in the Middle East is certainly changing its perception of how this technology can add value to their business.”
Comparing flight request data for the period November 2014 through October 2015 with the period November 2015 through December 2016, the Middle East actually saw the weakest rate of growth—at 9 percent—compared with other international charter markets. By comparison the number of requests handled by Avinode Marketplace grew by 29 percent in Russia and the CIS, by 15 percent in Europe and by 19 percent across the rest of the world.
For the period January 2014 to October 2016, the number of charter flight requests each month has fluctuated from a low of just over 1,000 in August 2014 to a high of around 3,500 in June 2016. As of October, it stood at around 2,500.
In July 2016, 500,000 global trip requests were sent through the Avinode system. The company predicts that by the end of the year, more than 3.5 million trip requests will have been made.
So far this year, five of the aircraft most requested by Middle Eastern customers have been heavy jets, with the others being in the ultra-long-range and midsize categories. The most popular aircraft was Bombardier’s Challenger 604/605, followed by the Embraer Legacy 600/650, the Gulfstream G450, the Bombardier Global 5000 and the Hawker 750.
“Our team has an exciting year ahead in the Middle East as we welcome new members and partners to the Marketplace,” King commented. “We are certainly buoyed by the greater understanding of the industry’s economic value in the region and the consequential airport development at Al Maktoum International [DWC], Sharjah International and Al Bateen Executive Airport [in Abu Dhabi]. While Dubai continues to be considered as the hub for business aviation in the Middle East, there are opportunities for all areas, and we look forward to helping our partners take significant steps forward over the coming months and years.”
Making Payment Easier
At the U.S. NBAA show in November, Avinode (Stand 635) launched its new PayNode payment platform for business aviation. Through an exclusive agreement with American Express, PayNode allows passengers to pay directly for charter flights via credit card. The company is now looking to offer bank wire transfer arrangements as an alternative means of payment.
According to global business director Magnus Henriksson, PayNode is to the charter market what PayPal is for eBay. The average $35,000 charter transaction, he explained, consists of two separate transactions: payer to broker and broker to operator. “The problem is the operator won’t take off until they have the money and the broker won’t pay [the operator] until they have been paid,” he said. “This typically creates delays for bookings that happened 48 to 72 hours before.”
The plan to introduce a more efficient means of conducting charter payments took shape after electronic payment specialist MultiService (part of the World Fuel group) bought a majority stake in Avinode in 2014.
