The Dragon on a Shop­ping Spree

Prac­ti­cal air­plane pur­chases, hand-me-down jets and more, our Asian neigh­bour is set­ting new busi­ness avi­a­tion trends

SP's Aviation - - TABLE OF CONTENTS - By AR­PITA KALA

While ma­jor global avi­a­tion op­er­a­tors are still reel­ing from the flat fest that was the re­cently con­cluded Wings In­dia 2018, the up­com­ing ABACE Shanghai 2018 may just get ev­ery­one’s spir­its soar­ing to the skies. From military power to busi­ness avi­a­tion or even the largest pop­u­la­tion, In­dia and China have long had a friendly (some­times un­friendly too) com­pe­ti­tion of sorts in a quest to be the best or the first in all. And, the Asian Busi­ness Avi­a­tion Con­fer­ence & Exhibition (ABACE) is no dif­fer­ent. Re­cov­er­ing from al­most a decade long slump in busi­ness avi­a­tion af­ter a me­te­oric rise, the East­ern neigh­bour seem to be all set to make up for lost time.

CHINA IS ON A SHOP­PING SPREE

Pres­i­dent Xi Jin­ping’s anti-cor­rup­tion cam­paign in 2014 has been at­trib­uted by many for the slump in Chi­nese Bizav. How­ever, the Asia-Pa­cific re­gion, es­pe­cially China, still re­mains one of the busiest mar­kets for many busi­ness jet op­er­a­tors. Ac­cord­ing to a 2015 re­port by busi­ness avi­a­tion con­sul­tants Asian Sky Group (ASG), main­land China re­mains the largest sin­gle mar- ket in the Asia-Pa­cific re­gion with 313 busi­ness jets with a net in­crease of 13 busi­ness jets in the fleet in 2016.

Mean­while, 2017 ex­pan­sion plans for Boe­ing Busi­ness Jets fleet in China in­cluded two BBJs, one BBJ 2 and one BBJ 787 en­ter­ing ser­vice with two BBJ MAX 8s fore­casted to be de­liv­ered in 2018. Busi­ness jet man­age­ment com­pany HK Bellaw­ings wel­comed the first Das­sault Fal­con 8X in Greater China and a 7X in 2017. In fact, China is the sec­ond-largest mar­ket for the Fal­con 7X with 29 of the model cur­rently in the coun­try, though it’s still a far cry from their boom days when there were nearly forty 7Xs in China. Das­sault’s head of global com­mu­ni­ca­tions, Vadim Feldzer agrees, “In the past, Chi­nese cus­tomers didn’t re­ally care about the cost, they just wanted the biggest jet with longest range and ev­ery­thing more, more, more... there weren’t any ra­tio­nal pro­cure­ment de­ci­sions. They pre­fer to pay for expensive travel rather than have their MVPs stuck in lounges in the mid­dle of nowhere wait­ing for a con­nect­ing flight. Chi­nese at the peak of the mar­ket in 2010 were look­ing for the most expensive jet in the world.”

LESS IS MORE

How­ever, con­trary to their os­ten­ta­tious busi­ness jet choices in the past, the new age Chi­nese buyer is more prac­ti­cal. In 2016, Em­braer made some rather staid de­liv­er­ies in the form of one mid­size Legacy 500 and two light Phenom 300s in the Chi­nese mar­ket. This just shows that the trends are shift­ing towards more ma­ture pur­chases in the coun­try. The afore­men­tioned ASG re­port also im­plied that there is a grad­ual shift towards procur­ing pre­owned jets. It claimed that ap­prox­i­mately half of the jets pur­chased in China in 2016 were sec­ond hand. Feldzer has a sim­ple rea­son be­hind the sud­den aus­ter­ity. He says, “Let me ask you, how many hours on an av­er­age do the own­ers of pri­vate jets fly? The an­swer is some­thing that we have ex­pe­ri­enced in the ul­tra long range Fal­con 7X. It is ca­pa­ble of fly­ing 14 hours, but on an av­er­age, it flies only for 2.5 hours, not more. This means that most of the time, the air­craft is do­ing short dis­tances. Chi­nese buy­ers have changed their minds and so has the global mar­ket. It’s about ra­tio­nal pur­chases now...like why buy an 8X if you don’t need the max­i­mum range?”

THE DESI CON­NECT

“The surge will take In­dia from 18th glob­ally (in terms of pri­vate jet num­bers) to fourth. In­trigu­ingly, the coun­try boasts al­most dou­ble (111) the num­ber of pri­vate jets than China, even though China has many more bil­lion­aires,” wrote jour­nal­ist Wil­liam Stol­er­man in a 2010 edi­tion of Lux­ury In­sider, a lead­ing on­line lux­ury mag­a­zine. And, while many may scoff at the thought of this, a few in­dus­try vet­er­ans con­sider it a likely sce­nario.

The CEO of Club One Air, Ra­jan Mehra re­cently spoke about the same to Sun­day Guardian Live. He said, “Just about eight to ten years ago, In­dia had more pri­vate planes than China and then in the last ten years, China sud­denly ex­ploded with eco­nomic growth, with peo­ple hav­ing plenty to money to buy jets. Dur­ing this time, a lot of peo­ple in China bought pri­vate jets. But in the last two years, the Chi­nese govern­ment has clamped down, mak­ing it dif­fi­cult for busi­ness­men to buy pri­vate jets. In that re­spect, if we can get our act right, we can even get ahead of them.”

How­ever, the facts may just give you some food for thought. South China Morn­ing Post re­ports that Main­land China had 466 busi­ness jets fly­ing its skies at the end of 2016, with 114 in­di­vid­ual busi­ness peo­ple owned 164 pri­vate jets, a num­ber that is less than In­dia’s busi­ness avi­a­tion fleet of 487 in 2015 re­ported by BAOA.

Hu­run Busi­ness Jet Own­ers 2017 re­port says ‘based on its fi­nan­cial progress and eco­nomic size, there is enough de­mand for 1,900 busi­ness jets to be op­er­a­tional in the coun­try.’

In China’s Five-year Plan for 2016-2020, at least 50 new civil­ian air­ports are now be­ing built to fa­cil­i­tate busi­ness and leisure trav­els. Mean­while In­dia also har­bours sim­i­lar plans with new he­li­ports and air­ports com­ing up for the UDAN scheme. Club One Air’s Ra­jan Mehra thinks that this may be the boost In­dian busi­ness avi­a­tio­nis look­ing for. He told us, “Some of the smaller towns don’t even have air­fields, but the good news is that this govern­ment is look­ing at these con­cerns very pos­i­tively. They are do­ing it for re­gional con­nec­tiv­ity, but it will help us too be­cause we will also get to use the airstrips and in­fra­struc­ture.”

It is also im­por­tant to note that the same Shanghai-based Hu­run Re­port’s bil­lion­aire list places In­dia on the third spot with China lead­ing the list by pro­duc­ing four new bil­lion­aires ev­ery week.

Nowa­days, com­pa­nies pre­fer to pay for expensive travel rather than have their very im­por­tant peo­ple stuck in lounges in the mid­dle of nowhere wait­ing for a con­nect­ing flight

AIR­CRAFT ON DIS­PLAY AT SHANGHAI HONGQIAO IN­TER­NA­TIONAL AIR­PORT, SHANGHAI

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.