“We were consciously looking for a place that could provide the most profitable strategic position on a global scale,” says Mikhail Alenkin, CEO and founder of ArcosJet. We have chosen Dubai as a growing international financial and innovation hub. We made the right choice when we saw the massive transformation that took place in the midst of a pandemic. Dubai has always been the key to the Middle East market, but then it became a full-fledged hub connecting the Middle East, Africa and Asia.
Given that the UAE’s active fleet has overtaken Saudi Arabia’s fleet, formerly the largest in the Middle East, as well as the migration of ultra-high net worth individuals (UHNWI) to the region and a strong global recovery in oil demand, this decision seems right, but it is not without problems.
“The Middle East is a very interesting market with its own mentality and traditions,” Alenkin said. Building relationships required a special approach. More than half of the roughly 500 business jets flying in the region are long-haul and large aircraft, further increasing the segment's importance in terms of cost and turnover.
"This is a feature of the region," Alenkin continues. “It’s not just the mentality and personal preferences of the owners: to get to any of the world’s nearest economic and financial centers, you need to spend 5-8 hours in flight. This, as well as the desire to travel in large groups and with a significant amount of luggage, inevitably makes the range of non-stop flight, cabin size and luggage compartment volume key factors when choosing a business jet.
Arcosjet specializes in long-haul business jet deals and has accumulated extensive experience in this market. Alenkin believes the difference lies in the details.
“Our task is not to surprise and impress customers, but to meet their expectations and deliver exactly what they need. We help the customer to buy or sell the aircraft profitably, efficiently, confidentially and conveniently. We use market knowledge and are constantly monitoring and researching it, he says. “We also pay special attention to the development of the latest digital technologies and services. The company believes that process automation and blockchain can make work easier, more transparent and more comfortable for all market participants.
The second-hand business jet segment is now a sellers market, with average prices breaking records and the number of business jets on sale down to about 4% of the active global fleet. As a result, the price of some younger models increased by an average of 20-30%.
“In such a market environment, it is very difficult to find a good aircraft at a reasonable price. A significant number of aircraft are sold off-market and pricing is beyond logic. But this situation is temporary, Alenkin believes.
The company expects demand in the Middle East market for large and long-haul business jets to continue to grow thanks to new flagship models that manufacturers are preparing to bring to market, including the recently announced Bombardier Global 8000, Gulfstream G700 and G800, as well as the Dassault Falcon 10X.
In the long term, we see sustainable development and widespread adoption of green technologies in the industry. New technologies are being created, such as eVTOL, biofuels and others. I believe that as a result of the development, all business aviation can significantly transform as new aircraft, services and formats appear, business processes and approaches change.
