China corporate jet sales ‘dire’ after corruption sweep
China’s corporate jet market is facing a “dire” 2015, an aviation consultancy said, as slowing economic growth and a persistent crackdown on corruption batter sales.
The number of corporate jets — also called business or executive jets — in mainland China rose 16 percent yearon-year to 297 in 2014, independent consultancy Asian Sky Group stated in its annual fleet report.
That was a slowdown from a 26.7 percent surge in 2013 and little improvement is seen for this year, it added, describing the prospects for Greater China — which includes the mainland, Hong Kong, Macau and Taiwan — as “dire indeed.”
The first US Gulfstream jets only ar- rived in China in 2003, widely seen as the dawn of the new market.
“The ongoing crackdown on corruption, I mean it just makes people sort of put their wallets away and think about it,” Asian Sky Group Managing Director Jeffrey Lowe said.
“China is not growing at the same rates as it was, and so the GDP (gross domestic product) growth is down as well,” he told a news briefing at the Asian Business Aviation Conference & Exhibition, being held in Shanghai this week.
China’s economy expanded an annual 7.4 percent last year, the slowest in nearly a quarter of a century.
Limits on airspace, most of which is controlled by the military, have also hampered the market.
Chinese President Xi Jinping launched a high-profile campaign against corruption accompanied by a government austerity campaign after he came to power more than two years ago.
Some analysts have been surprised by the duration of the drive, as previous campaigns have tended to wind down after a few high-profile cases.
“I think Xi Jinping will keep with this for a longer term. Everybody needs to work around that,” Fernando Grau, director of marketing and product strategy for executive jets for Brazil’s Embraer in China, told AFP.
Still, corporate jet makers are banking on growing wealth in China and its companies doing more business abroad to drive the market.