Small jets, big plans

Mak­ers of busi­ness planes see move­ment in China >

China Daily (Hong Kong) - - FRONT PAGE - By ZHU WENQIAN zhuwen­qian@chi­

In China and the Asia-Pa­cific re­gion, in­vet­er­ate wealthy fliers are fast up­grad­ing to small- and mid-size jets for pur­poses as var­ied as tourism and busi­ness travel.

Typ­i­cally, such jets hold eight to 10 pas­sen­gers.

Andy Gill, se­nior di­rec­tor of busi­ness and avi­a­tion for the Asia-Pa­cific at Honey­well Aerospace, a ma­jor provider of air­craft hard­ware and avion­ics sys­tems, said: “As the econ­omy grows, Chi­nese cus­tomers are start­ing to use busi­ness jets for travel within the re­gion as op­posed to fly­ing out of the re­gion.

“We think travel by busi­ness jets is go­ing to be­come more prom­i­nent for short­dis­tance flights, for pur­poses like busi­ness trips, tourism, and cross-sea fly­ing. We are al­ready see­ing that trend a lit­tle bit, and we think it’s go­ing to grow.”

For a long time, wealthy Chi­nese fliers fa­vored buy­ing or char­ter­ing large, lon­grange air­craft, mainly be­cause they trav­eled a lot for busi­ness out­side of the Asi­aPa­cific re­gion.

Such fliers had busi­nesses in Europe or the United States. To reach such places in exclusive com­fort, they needed long-range air­craft.

As their wealth in­creased, and more suc­cess­ful peo­ple turned wealthy, the tribe’s tastes, pref­er­ences and re­quire­ments, too, have evolved.

Cur­rently, there are about 300 busi­ness jets in China. Com­pared to the West, the busi­ness jet mar­ket in China is small and un­der­de­vel­oped. But China is see­ing strong growth in the sec­tor, a con­trast to the rel­a­tively slug­gish growth in ma­ture mar­kets.

Last year, China saw 28 per­cent growth in peo­ple look­ing to buy or re­place their busi­ness jets. In the Asia-Pa­cific re­gion, the growth rate was around 14 per­cent, ac­cord­ing to Honey­well Aerospace data.

“If you com­pare with the US, where there are nearly 20,000 busi­ness jets, China has three to four times the US pop­u­la­tion, so there is a huge op­por­tu­nity for the busi­ness jet mar­ket to grow in China. I’m very con­fi­dent about the growth po­ten­tial,” Gill said.

“Ob­vi­ously, the busi­ness avi­a­tion sec­tor is still in its in­fancy in China. I think there’s still a lot of learn­ing go­ing on in the in­dus­try about the ben­e­fits and posi- tive im­pact of busi­ness avi­a­tion. For ex­am­ple, the in­vest­ment in the new tech­nol­ogy of busi­ness jets will drive the growth for many re­lated ar­eas.”

Signs to that ef­fect are ap­pear­ing al­ready. For in­stance, Jiangsu Jet Co Ltd, a Nan­jing, Jiangsu province­based small air­craft-operator, started fly­ing a new 15-seat air­plane this sum­mer.

The busi­ness jet costs $16 mil­lion. Op­er­at­ing expenses would en­tail 35,000 yuan ($5,090) for ev­ery fly­ing hour of a char­tered flight, in­clud­ing wages for pi­lots, flight at­ten­dants and other re­lated bills.

“We have seen a few char­tered flights in re­cent months, mostly for do­mes­tic travel. We ar­range ev­ery­thing for pas­sen­gers. I ex­pect to see more peo­ple choos­ing to fly in busi­ness jets,” said Pei Shan­feng, an en­gi­neer for Jiangsu Jet Co Ltd.

Pei’s ex­pec­ta­tion is based on the fact that those who pre­fer exclusive jets are often en­trepreneurs, heads of states, top gov­ern­ment of­fi­cials and high net-worth in­di­vid­u­als. For the grow­ing num­ber of such fliers, busi­ness jets be­come essen­tial for busi­ness trips where time is at a premium.

To meet the needs of such po­ten­tial cus­tomers, French air­craft man­u­fac­turer Das­sault Avi­a­tion SA launched a new jet model, the Fal­con 8X, two months ago.

The Fal­con 8X is the qui­etest in its class. It also of­fers the long­est range — for in­stance, it can fly from Bei­jing to Los An­ge­les — and the long­est cabin among the Fal­con se­ries.

Das­sault said Fal­con 8X is ex­pected to get cer­ti­fi­ca­tion from China shortly. In com­ing months, the new air­craft will likely be on track for de­liv­er­ies to Chi­nese op­er­a­tors.

“We are very con­fi­dent about the growth po­ten­tial of the China mar­ket. It’s one of our key mar­kets, and we have added more staff to our team in China. For the Fal­con 7X, China is our sec­ond-largest mar­ket, in terms of de­mand,” said Kathy Liu, gen­eral man­ager of Das­sault China.

This year, Honey­well had pro­jected global de­liv­er­ies of

about 650 to 675 busi­ness jets worth around $18 bil­lion. The pro­jected vol­ume was a lowto mid-sin­gle-digit per­cent­age de­cline year-on-year, largely due to slower or­der rates for ma­ture mod­els and sta­bi­liza­tion in some types of de­liv­er­ies, ac­cord­ing to its re­port.

The com­pany said air­craft man­u­fac­tur­ers typ­i­cally make many mod­els, and are al­ways look­ing for niche mar­kets for their new of­fer­ings of busi­ness jets.

The Asia-Pa­cific re­gion has about 700 busi­ness jets. The mar­ket is show­ing an in­creas­ing op­ti­mism, de­spite the on­go­ing Chi­nese aus­ter­ity mea­sures. In the next five years, the re­gion could gar­ner up to 6 per­cent share of the global de­mand for new jets. And it is the fastest-grow­ing re­gion, the re­port said.

Cur­rently, busi­ness jets share the same air­ports with other com­mer­cial air­planes in China, but the sit­u­a­tion is likely to change for the bet­ter.

“As the busi­ness avi­a­tion sec­tor grows, spe­cific gen­eral avi­a­tion air­ports will come up. They will of­fer ac­cess to busi­ness jets or pro­vide bet­ter ac­cess to busi­ness jets. In Europe and the US, ma­jor cities typ­i­cally have their own ded­i­cated busi­ness air­ports,” Gill said.


Vis­i­tors at the fourth Ma­cao Busi­ness Avi­a­tion Expo check out a small jet on dis­play. Par­tic­i­pat­ing mak­ers of busi­ness jets from the US, France, Brazil said they re­ceived nu­mer­ous en­quires from po­ten­tial buy­ers in China.

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