Private jet prices out of Saudi Arabia jump 50% after Houthi attacks

The latest:

Chartering a private jet into or out of Saudi Arabia now costs more than 50% above pre-crisis levels, operators and brokers told the Financial Times, after Houthi attacks shut Riyadh’s main airport and forced airlines to scrap thousands of flights. War-risk insurance costs have climbed sharply at the same time, and several operators have stopped flying to the kingdom, thinning supply further.

Details:

• The benchmark fare: Alexander Graham of private aviation group Lux Jets said a flight last week from Qassim airport, north of Riyadh, to Geneva on a 14-seat Bombardier Global 6000 sold for 94,000 euros. The comparable price before the closure of Riyadh’s main airport was around 60,000 euros.
• The airport closure: Traffic in and out of King Khalid International Airport has been halted since October 10, following a wave of deadly Houthi attacks. A notice from the kingdom’s General Authority of Civil Aviation set Sunday for reopening, but the regulator has issued no update since, and operators expect a slow recovery.
• The scale of disruption: More than 5,500 departures from Saudi airports have been cancelled since the strikes began, according to aviation analytics firm Cirium. Lufthansa and Italy’s ITA have suspended services to the country, while British Airways and Air France had already postponed their flights.
• The workaround: Four private aviation executives said travellers leaving the capital are chartering from Qassim, more than 200 miles away. Those unable to afford private jets are crossing into Bahrain or Qatar to fly out, according to people on the ground. Saudi domestic carriers still operate from Qassim to Dubai, Cairo and Bahrain, based on Flightradar24 data.
• The corporate exodus: Several Western companies have approached brokers about moving senior leadership teams out of the city, to Dubai or back to home markets, four people familiar with the talks said. They added there has been no evacuation on the scale seen earlier this year, when tens of thousands left Dubai and the UAE after the Iranian war began.
• The price range: Charles Robinson, founder of the InterJets platform, said charters from Saudi Arabia to Europe are selling for up to $150,000, while flights to the UAE go for $30,000 to $50,000. Fewer operators will serve affected airports and some add surcharges “simply because the demand is there and the competition is not”.
• War-risk premiums: Toby Edwards, co-chief executive of Victor, said costs rise noticeably once war-risk cover is required. Large aircraft seating around 18 passengers can face a surcharge of about $20,000, while smaller 8 to 10-seat jets run closer to $8,000.
• The regional markup: Robinson said war-risk costs add up to 10% to some flights across the region, and slightly more on routes directly to and from Saudi Arabia. He said levels remain below the start of the Iranian conflict, when insurers charged $50,000 to cover a single flight.
• Empty legs: Graham said operators are repositioning empty aircraft into Saudi Arabia specifically to pick up passengers heading to Europe, a sign of how thin available capacity has become inside the kingdom.

Background:

Iran fired roughly 3,000 missiles and drones at the UAE during strikes earlier this year, far more than the number launched at Saudi Arabia. The kingdom also hosts fewer Western expatriates than the UAE, the region’s dominant financial and commercial hub.

Between the lines:

The pricing tells a supply story more than a panic story. With Riyadh closed, Lufthansa and ITA suspended and operators refusing affected airports, the remaining market is small enough to set its own terms. Robinson said many private jet clients are flying only as far as a lower-risk part of the region before connecting commercially onward to Europe or the United States.

What’s next

Watch for the General Authority of Civil Aviation’s next notice on reopening King Khalid International, whether Lufthansa and ITA restore service, and whether war-risk premiums on Saudi routes climb toward Iran-conflict levels.