JET ORDERS NOSEDIVE
Second-hand planes, rentals less risky bet for wealthy Chinese
SHANGHAI
CHINA’S rich are foregoing fancy new private jets in favour of secondhand planes or rentals, reflecting how the country’s business elite are increasingly shunning flashy signs of wealth amid slower economic growth.
Planemakers such as Embraer and Bombardier are shifting focus to after-sales services in response, while brokers are refurbishing older jets or hiring out planes as the once high-flying industry braces for its weakest growth in a decade.
Dealers at Asian Business Aviation Conference and Expo, here, one of region’s top shows, said second-hand jets now made up more than half of sales to wealthy Chinese entrepreneurs and corporations, up from under a third two years ago.
Chinese buyers were also becoming more pragmatic about buying cheaper, second-hand jets and giving them a makeover, they said.
“Now... while you can still get a Gulfstream 550 for around US$50 million (RM220.6 million) for a new one, you can get an extremely adequate plane for US$30 million,” said David Dixon, president of business jet brokerage Jetcraft Asia.
“So US$20 million is a lot of money to anybody.”
In part the shift reflects a broader trend that is making life tougher for firms selling luxury goods in the world’s secondbiggest economy, as Chinese buyers increasingly push for bargains on everything from highend handbags to holidays.
In such a market, where new planes quickly lose their value, dealers said second-hand jets were simply a less risky bet. Reuters