The Middle East has emerged as a strong market for private aviation, according to a new report by Wealth-X and WINGX Advance. The typical private jet owner in the Middle East is younger than global jet owners and, despite an average net-worth of more than $500 million less, has planes an average of three times as expensive, near $50 million compared to the average global owner’s $16.4 million. The numbers show not only that private aviation is a viable market in the Middle East, but other high-priced luxury offerings could also find a home. The Middle East market has a good long term prospect, given: strong economic growth potential, particularly to the extent that Gulf states can develop non-oil sector; long distances between trading hubs, with alternative transportation inadequate; and infrastructure limitations, both in physical and human resources, which will be addressed over time,” said Richard Koe, managing director at WINGX Advance. “In the short term the prospects are cloudier, due to regional conflict, poor infrastructure, and for now, economic impact of low oil prices.” “Private Aviation in the Middle East: Owner Profile, Trends and Business Opportunity” looks at the demographics of Middle Eastern jet owners compared to global jet owners and the flight trends of the private aircrafts.
Private jet ownership is pretty much exclusive to ultra-high-net-worth individuals with tens of millions, if not more, in assets. Although North America continues to dominate the industry, that share has gradually dropped over the past twenty years. According to the report, there are 211,275 UHNW individuals in the world, with an average net-worth of about $140.5 million; among Middle Eastern UHNW individuals, the number is noticeably higher, crossing $166 million. That Middle Eastern jet owners have a lower net-worth than global jet owners despite UHNW Middle Easterners being worth more, on average, than UHNWs elsewhere. This means that the individuals who stand out even amongst UHNWs have not been reached. Given that the average liquidity of the Middle Eastern jet owner is around one-third of his net-worth compared to about 12 percent for global jet owners means many of these consumers may be accessible. Almost 30 percent of Middle Eastern jet owners are involved either in industrial conglomerates with another 25 percent being in non-profit and social organizations. The same two industries make up barely 10 percent of global jet owners, whose field of work is more diverse with around one-fifth working in finances, the most popular field.
As the report notes, this is a reflection of royal family members – 70 percent of Middle Eastern jet owners inherit at least some of their wealth, compared to only a quarter globally – and economies being driven through infrastructure improvements and energy. Preference for large aircraft is not just a simplistic reflection of prestige, but one of practicality, since trips tend to be predominantly family oriented, with close and extended family members expected to accompany the patriarch. Typically, personalized VIP commercial airline interiors serve the families’ hierarchal traditions well, matching closely the rituals of daily life, including a heritage of eating together. To a different extent than in Europe, business aviation in Middle East is private and has an important luxury component, although it is used primarily for lifestyle rather than just showing off.