by Ian Sheppard - IAN News
Nomad Aviation’s portfolio includes jets from Cessna’s light Citation CJ series.
Having moved its base from Berne to Kloten, near Zurich Airport, last year, the Swiss company Nomad Aviation is broadening its customer base and reach. Nomad will, as part of a new strategic expansion plan, base an aircraft in Singapore, it’s first outside Europe. The aircraft will be a Bombardier Challenger 604.
Heinz Keohli, executive chairman and CEO of Nomad, told AIN that the company now operates three Challenger 604s, an Embraer Legacy 650, a Bombardier Global 5000, a Beechcraft Premier 1 and one Cessna Citation CJ1. Charter work is predominantly assigned to two of the Challengers, the Global and the Legacy, said Koehli. “In addition we have a fleet of five managed planes for corporations and private individuals—including a Global XRS and Citation CJ,” he added,
“The company’s strategic goal is to expand, as the company mainly did charter work in the Russia market previously,” said Koehli, who before acquiring Nomad in June 2015 was a founder of AMAC in Berne, having been with Jet Aviation for many years before 2007. “We want to expand into the Middle East and Europe, especially with more direct clients, and we also want to grow the aircraft management side.”
Koehli reflected on how tough the market is. “Charter is a tight-margin business, but expanding into the Middle East and Far East, the margins are better. So we’re planning to base one of our Challengers in Singapore and start charter there in April or May this year,” he said. “It’s a test—we have a venture established with Hawker Pacific locally,” he added.
So the company’s main goal this year is to start a new outshoot of the company in the Far East, while continuing to grow and serve the European, Middle East and Russian markets. “Our core is still Russia, with 90 percent [of the operations],” said Koehli, “However we used to fly 90 hours a month in Russia, but now it’s about 60.”
Koehli continued, “We would like to find owners of planes we can manage and also run on charter on our AOC. But we have to be careful, as we are dependent on the owners; you risk having an AOC but no planes available.”
He suggested companies such as Nomad need “two legs” with its own planes “that you control” and an extended fleet of managed aircraft. He said the company would like to place more planes in both Russia and Singapore.
Meanwhile, Koehli suggested that the market in Europe “has picked up” but more for the smaller Embraer Phenoms and Cessna Citations, while “larger cabin are more popular in the Middle East and Russia.” He said that the U.S. was not an option for the company as “the U.S. market is completely full—the emerging markets are better.” Nomad is interested to explore the market more in places like India and the Far East, and “possibly new places, like Iraq.”
Europe remains of considerable interest though. Having built its business on the Russian market through local brokers after being founded in 2008, Nomad “neglected the European side of the business, so when the Russian side turned south, they were on the wrong foot.” He was referring to the founders of the company, two very experienced business jet pilots, Claude Neumeyer and Rainer Schurr.
In conclusion, Koehli commented on consolidation in the market, or the lack of it. “Everyone hoped it would happen, but it hasn’t really happened so far. Everyone hopes that the cheap operators will go away, because they can’t afford to be an operator.” He noted that the Middle East suffers in particular from “operators without a license—grey market people. The hope is that a handful of good operators will survive—but the differentiation is price.”
He suggested also that operators were fighting back against brokers by trying to get direct customers. “The brokers took away the business,” he explained, by wrapping the operation up as a package with other services and taking most of the margin for themselves. “The operators gave it away as they just wanted to fly from A to B, so they have become just providers of flights to brokers. So operators are flying for minimal margins, 3-to-5 percent.”
Another driving factor is that the charter market is “extremely competitive” so it is attractive to find new “green field” markets out East—“in Southeast Asia, Indonesia and Thailand for example.”