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Private Jet Industry Suffers Corruption Crackdown In Saudi

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A crackdown on corruption in Saudi Arabia has dented the kingdom’s private jet industry in a sign of the impact the campaign has had on private enterprise and the wealthy.

Dozens of planes, owned by individuals and charter companies and worth hundreds of millions of dollars, are stranded at airports across the kingdom including Riyadh and Jeddah, sources told Reuters.

Some were handed over to the state in settlements reached after the crackdown was launched in late 2017, when dozens of princes, businessmen and government officials were detained.

Others belong to Saudis who either face travel bans or are reluctant to fly the planes because they are wary of displays of wealth that might offend the government over the anti-corruption campaign.

The government media office did not immediately respond to requests for comment on the impact of the anti-corruption drive on the private jet industry.

The crackdown’s impact on the business community and private enterprise has shattered investor confidence and contributed to a sense of uncertainty around the policies of Crown Prince Mohammed bin Salman.

The idle aircraft, which one of the sources estimated at up to about 70, include Bombardier (BBDb.TO) and Gulfstream jets, the sources said.

There are also larger Airbus (AIR.PA) and Boeing (BA.N) aircraft that are more commonly associated with commercial airlines but are often used in the Middle East as private jets.

A Boeing 737 MAX or Airbus A320neo can cost up to $130 million, though the final cost depends on how the jet is fitted out with technology and amenities, including private bedrooms, meeting rooms, and even gym equipment.

The number of registered private jets in Saudi Arabia stood at 129 as of December 2018 compared with 136 a year earlier, according to FlightAscend Consultancy data.

Private jets offer users flexibility as, unlike commercial airliners, they are not constrained by arrival and departure time slots. They also enable users to travel more discreetly.

 

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