DC Aviation Al Futtaim (DCAF, Stand 682) is the FBO, MRO and aircraft management company that set the tone for activities at Dubai World Central Airport (DWC/Dubai South) by entering the market three years before its rivals. It expects two new aircraft to join its managed fleet of four before the end of the year, according to what general manager Holger Ostheimer told AIN in an exclusive interview last month.
“We will have five aircraft [under management] in November, and expect to have six aircraft in December. We will be increasing our fleet with the Dassault Falcon aircraft. The aircraft to join us in November will be a 7X,” he said.
In mid-2015, DCAF announced that the managed fleet included a Bombardier Challenger 604. “Discretion is right up there on the list for credible shareholders, only beaten by flight safety. In operations and MRO, aircraft safety is everything,” said Ostheimer.
“We have increased handling activity, fleet size, and our footprint as a whole—in infrastructure, competency and maintenance qualifications and certifications, as well as aircraft types covered. We are looking to the future with moderately positive expectations.”
He hailed a “moderate” increase in MRO, “significant” increases in activity on the aircraft management side, and added that, with the shift in its FBO business from DXB (Dubai International) to DWC, the new airport offered improved business opportunities.
“In the same timeframe, we have further improved hangar utilization by signing up new hangar clients. We have also managed to increase our MRO activity and, over the course of the year, we obtained CAR 145 approval in the UAE.”
He said DCAF had concluded phase one of its MRO build-out strategy, a 5,700-square-meter (61,354-square-foot) hangar, and had plans for a second 7,500-sq-m (80,729-sq-ft) maintenance facility in which operations will begin in the third quarter of next year.
“We have put Hangar One into operation. The FBO is more and more busy. We have made the
investment, especially through our shareholders’ resources, coming with the associated significant costs. We are interpreting the market by once again taking the courage to put another level of investment into the game, to build a second hangar to increase our presence, but overall to provide the preconditions for further diversification.”
The existing DCAF hangar can accommodate four Airbus ACJ320s or Boeing BBJ737s as well as two ultra-long range business jets such as the Falcon 7X, Bombardier Global Express or Gulfstream G550.
Lufthansa Co-op
In May, Lufthansa Technik announced a cooperation agreement with DCAF. “The two companies plan to offer their VIP customers a first-class package of services at Al Maktoum International Airport [DWC]. An experienced, highly qualified team of engineers and mechanics will ensure cost efficiency and quality that are ‘made in Germany’,” said Lufthansa Technik.
That month also saw DCAF announce a ground handling agreement. “We have a number of flight support agents that we are cooperating with. One of these is United Aviation Services, with whom we have a very healthy exchange of services,” Ostheimer said.
Pure management had been a better business for DCAF than charter, he said. “We observe a trend of aircraft owners predominantly utilizing the aircraft themselves rather than making them available for charter. The aircraft charter market has come under pressure so that the returns provide for a lot less encouragement for wanting to make those capacities available to the third-party charter market.”
From a global perspective, regional markets are under considerable pressure, due to poor economies as well as political issues. “The UAE has proved to be a stable location and has continued to be interesting enough for those individuals able to operate aircraft and partially or fully residing in the UAE. The UAE market, as an isolated case, provides for much greater hope than any other market on the international scene,” he said.
The European market, with strong expectations for Turkey dating from 2012, has not seen any recent growth, while over-regulation has stymied the Indian market, leading several local high-net-worth individuals (HNWIs) to use the UAE as a base, he added. Commercial opportunities in China have not materialized either.
The U.S. remains the biggest market overall; but, he observed, despite promising trends in U.S. activity and unit sales, the only promising market at the moment is, in fact, the UAE. “The UAE is a very natural choice,” he said.
Flight Ops Concern
Flight-crew duty-time regulations are under study by the UAE’s GCAA. “At one point sooner or later, the relevant flight-crew duty-time regulations will take effect. We just hope that the GCAA will remain in open dialog with the commercial business-jet operators to provide the special provisions needed to make the operation of a business jet under a UAE or A6 [UAE registration code] flag possible,” said Ostheimer.
He added, “What you see on the international scene is putting the responsibility more into the hands of the operators, with their own risk assessment, particularly towards flight duty-time regulations, with each operator having a very good look at what is being perceived at base and what isn’t, and then going to the regulatory authority for approval or otherwise. That is a very interesting trend.
“What finally will be formulated through the GCAA—the flight ops department—remains to be seen. We are curious and hopeful that those regulations will [take] special consideration for business jet operations.”
Estimating total movements in the Dubai market at around 10,00 to 12,000, he said that while these numbers were on an international scale, providing for moderate growth scenarios would continue to be difficult for the five FBO and operator license holders at Dubai South.
“Dubai [offers] an appealing, secure and safe lifestyle. We are surrounded by a culture that provides opportunities for business. Our clientele is very much dependent on those business opportunities. These occur through the appeal of the UAE and Dubai in particular as a private or commercial residence,” he said.
“Since that business lives off HNWIs, the particular attraction of Dubai for those individuals will for a long time provide for more opportunities locally than other areas internationally.”
Ostheimer is alert to the competitive threat posed by new FBO entrants at the DWCVIP Terminal.
“Philosophically, we are not working against the competition. We are working for the client. We would like to be a logical choice, an attractive proposition so that the client can make a positive choice for us, while we truly respect and appreciate all the competition,” he said.
“What we do see in the global economics and general demographics of wealth is that more and more people are becoming high-net-worth or ultra-high-net-worth individuals. Demand for private and business aviation transport is not going to recede in Dubai. I can see enough opportunities arising that it’s going to keep us busy long enough that we will stay here for a long time.”