Moving markets

Air Charter Service director, Middle East Dmitriy Korshunov explains how the charter company’s business is developing in a downturn

How has Air Charter Service performed during the economic downturn?

August and September 2009 were record months for Air Charter Service’s Dubai office. We witnessed the largest increase in ad-hoc charters since we started operations in 2006. According to our 2009 year-to-date figures, we have carried out over 2700 charter flights so far – 500 more than at the same time last year. ACS, worldwide, has experienced around 20% increase in sales so far in 2009, with our Dubai office leading the way in growth.

How has this increase occurred?

People prefer to fly ad-hoc now rather than own their own jets. When the fuel price dropped it was cheap to charter flights when compared to commercial flights, and now, those who were considering owning aircraft have dropped their assets but still need to use private air travel in place of a scheduled service, so they will consider chartering.

Are you surprised at the volume of growth in the business?

Correct methodology and a tried and tested model means that we have not been affected by the economic turmoil. In August we tripled our growth and although I am satisfied with our results, there is always room for more.

Is the sector damaged by larger companies like NetJets having to downsize?

The NetJets phenomenon wasn’t in my opinion based on concrete principles. I compare it to time-share apartments in Spain. Were people buying for a real need or deluded by the concept of NetJets?

Time-share in aviation saw fast growth and then a huge collapse. It only took 10 years to fail but with tremendous losses of nearly US$300 million you wonder if it will ever make a come-back. With regard to ACS, it gives us the opportunity to explain that we do not have hidden charges post flight. An ad-hoc service often offers around 30-50% savings for the customer when compared to a jet card scheme.

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Which markets will ACS be pursuing in the future?

The region’s sports community is showing a lot of interest in private air travel. We moved a Middle Eastern football club for the Asian Championship League earlier this year, and we also carried out numerous flights for the Champions League in May and the Gulf Nations Cup. We are also serving executives wanting to fly to Iraq. Oil and gas investors are flying in and out of Erbil for example, but we also operate many flights to Basra and Baghdad for construction companies and logistics companies.

Do you think Iraq will become a popular leisure destination?

We have not had any enquiries from people wanting to travel to Iraq for leisure purposes, but there are thousands of people wanting to travel to Najaf for religious reasons. We have had numerous enquiries from the Indian community in particular.

Will you be pursuing any new markets?

We plan to expand our commercial jets offering and increase our sales force to serve the region’s executive jet market.

Do you think the industry will recover from the global financial crisis?

We hear that we should be now coming to the bottom of the financial crisis and the upswing has already begun, and I have seen certain aspects of the industry changing. However, the regional economic growth over the last 10 years should have created a significant buffer for the industry to survive this period.